Yes, we are (Ignite dao) on some incentives to make users more sticky with reputation scores, autostaking, instant unstaking etc. However, if CEX.IO goes to 4% then why would anybody want to stake there? These stakers will automatically go to other stakers in the ecosystem that are actually providing value with the same % (4-5-6). This forces CEX.IO to lose market share unless they start to provide value to users and the market dynamics will be more healthy and this will positively impact the ZIL price. If everybody starts at 4% or 5% then the only way to have people stake with you is what do you offer that others dont? If you just lower your commission you dont have to innovate or offer anything. Even if you want to give more to users you just airdrop after receiving the commission. At least you get the marketing and perhaps more people outside of the Zilliqa ecosystem will join the community. This would then at least have some benefit/value.
I think the main issue with people criticising this is most of them are looking it just from a user point of view, not from a business point of view. People always complain about lack of dapps on Zilliqa. Well guess what. Somebody has to build it and there are opportunity costs for spending time and money to build things. The SSN commission provides incentive for builders. Creating price wars when there is lack of competition at this stage will kill innovation and slow down development even moreā¦
I completely get where youāre coming from and think itās a shame that zilliqa hasnāt been able to capitalise on its first mover advantage (in so many domains!) to attract more funding. So I agree a 4% base fee makes sense on that basisā¦
However, my personal concern isnāt with accumulating more zil for myself but with the broader protocol design and sustainability of the network with the current block reward issuance rate (which obviously impacts staking rewards).
āWith the current issuance rate, the remaining tokens will be fully distributed within the next two years. The proposal assumes that two years will not be enough for Zilliqa to mature in a way that rewards can be paid only by transaction fees. This is why we have to lengthen the reward distribution by reducing the issuance rate.ā
So my point is, if a project canāt sustain its business on SSN commission at 2%, itās not going to be able to sustain its business at 4% commission on reduced block rewards.
I will vote FOR the 4% on the argument you have presented (particularly to see Ignite succeed), but zilliqa will need to reduce block rewards ASAP if the ecosystem is to survive beyond the next two years, in which case SSN projects will therefore need to ween themselves off SSN commissions as a main source of income.
TLDR; any benefit this proposal brings for SSNs actively developing on zilliqa will (need to) be short lived as either 1) block rewards will reduce or 2) the network will grind to a halt.
Yes I agree, its not a long-term sustainable solution just to rely on SSN commission. However, hopefully in the next months/years we are able to create multiple sustainable revenue streams. Or if Zilliqa moves to PoS we are able to tap into that.
On another note, I understand the original ZIP set to 20% quotum, but I think now over time and in a bear market like this not a lot of people will participate. 20% of the total circulating supply is a lot! I think 10% will already be hard to achieve. 20% was already hard to reach in a bull market IIRC. When I was working at Zilliqa the team wanted to reduce it to 5% or 10% but it never happened.
@Edouard what do u think of adjusting this to 5% and if its a close call do another vote and raise the quorum? Else we will do a whole vote, we wont reach quorum and then we have to do another vote just to adjust quorum and then redo the vote but I think its more about the 50 for or 50 against instead of the quorum.
With new SSNs joining who put their % of commission at zero percent there might be a race to the bottom. Which results in innovation being undermined in my opinion. Iām in favour of a minimum threshold of 4% commission fee
Since we are talking about funding and development, whats the function of Zilliqa capital in all of this? Isnt there a funding mechanism for legitimate projects building on Zilliqa?
How did projects like Solana and NEAR explode suddenly? I am sure there is more than Devs to their expansion. What about the partnerships announced by Zilliqa? Are they feeding the network with anything?
I already voted in favor, as a first step towards improving the network. I dont want to get off topic, but i believe zilliqa has to revise its overall strategy. They missed alot of opportunities and advantages.
Legitimate projects on a competitive block chain get funded. If projects on Zil having problems getting funded then either projects are not that good to begin with or the L1 is just seen as inferior with better investment opportunities elsewhere.
The reference to reduction in rewards was on supposition that Zil became more expensive and possibly influenced transaction costs prohibitively.
Honestly in crypto 2 āmoreā years is an eternity. If canāt build transaction scale to offset dilution by then Zil lukely dead anyway
say the comission baseline is raised to 4%, how would you convert existing staked zil to other nodes? If 4% is the minimum, i think alot of zil holders will keep their allocations as is due to lack of awareness on the subject and the resistant human nature to change.
if CEX soft staking is counted towards the total zil staked in CEX node, then people will tend to keep their zil on CEX exchange as it provides flexibility in moving their zil tokens versus hard staking (14 days unlocking period).
Even if thats the case, market dynamics will allow for a more competitive environment where people contributing to the ecosystem will gradually increase in market share.
Yes this could be, but a similar bank run like FTX could happen on CEX.io. Itās a bit dangerous to do this. Not sure why people would risk it and if its even legal to use other peopleās funds to cover for the unstaking
@Edouard, I think itās fairly certain no 20% quorum will be reached this vote or for any other vote. Especially in this current bear market sentiment. I suggest to do 5% and then if its a very close result (e.g. 47% - 53%) you increase the quorum for a revote.
Thank you, I agree that quorum can often be hard to achieve.
The 20% quorum is based on ZIP guidelines. I am not sure we can amend the quorum criteria for this specific vote.
However, we may be able to make a specific governance proposal on quorum ā would we need 20% quorum to adjust the quorum to 5%? Iāll dig into this!
If you want to innovate no one is stoping you.
If you are so confident that your project will be great success then use your money to create something that will have great ROI.
I donāt think commission should be 4%.
Freedom of choice is my option.
yes, but not yet. This forum vote has to go through first, if there is enough support and interest then it will go to a vote utilising gzil
If the forum post gathers enough support, the proposal will then be implemented for voting via Snapshot.
If the final proposal passes, SSNs will be invited to respect the will of decentralized governance, and adjust their commission fee accordingly. If SSNs do not match the minimum commission fee requirement within a reasonable timeframe after the proposal is enacted, the Zilliqa blockchain will need to be updated so that all SSNs cannot set fees lower than 4%. In this case, necessary changes will be implemented by Zilliqaās protocol team, and the networkās upgrade timeline will be announced after the implementation is completed.
Iām big holder of Zil and I completely agree with this proposal.
A minimum SSN commission fee of 4% will remove useless SSN price wars and will increase a decentralization. 4% from 13% revenue is not a big sum, but it can increase a price of $ZIL so every single $ZIL holder will gain much more from this at the end.
Developers are the blood of any crypto ecosystem. If we have more developers - we will have more dapps, better decentralization, more transactions, more fees for network and as a result better $ZIL price. But If they suffer because of not a honest competition with SSN nodes who make low or zero commission they will be unable to continue a work and we will get the opposite result. I donāt want to get the opposite result. I want the best possible future for Zilliqa ecosystem.
Hi.
Why increasing up to 4% when Ignite DAO has a fee of 5%?
I can almost guarantee you that those people who staked with CEX, will continue doing so, just CEX will get twice as much as before, hence, will accumulate or sell more.
Those who staked with CEX at 1.99% will choose CEX with 4% over Ignite DAO with 5%.
Minimum fee should be no lower than the fee of a seed node that is currently building most for the ecosystem.
So either Ignite DAO shall lower their fee down to 4%, or the minimum fee should be just 5%.
Otherwise it is a bit pointless.
I would make it 5% instead of 4%, but Zilliqa wants 4%.
A mininum SSN node commission fee will make an honest competition possible where SSN nodes attract users with good technologies instead of low commissions.
Iāll dig into this!