Difference between revisions of "How-To: SNS tokenomics configuration"
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== Goal == | == Goal == | ||
| + | The purpose of this page is to gather information that assists teams in selecting a tokenomics structure for their SNS DAO. Additionally, it aims to aid potential SNS DAO participants in evaluating the proposed tokenomics configurations of an SNS. | ||
| − | + | == SNS tokenomics set-up == | |
| − | + | The '''SNS governance framework''' is a customizable version of the NNS framework. All its parameters can be set in the [https://github.com/dfinity/ic/blob/master/rs/sns/cli/sns_init_template.yaml SNS initialization file], which also contains a comprehensive guide to these settings. For more detailed information about '''SNS rewards''', please refer to this [https://internetcomputer.org/docs/current/developer-docs/integrations/sns/tokenomics/rewards link]. | |
| − | == SNS | + | == SNS decentralization swap == |
| − | + | In the '''[https://internetcomputer.org/sns/faq#what-is-a-decentralization-swap SNS decentralization swap]''', community members have two ways to get involved. One is '''direct participation''', where they can exchange their ICP for SNS tokens. | |
| − | + | Alternatively, community members can engage indirectly through the '''Neurons' Fund''' (NF). The extent of the NF's involvement in a specific SNS swap is decided by the [https://wiki.internetcomputer.org/wiki/Matched_Funding Matched Funding scheme]. This scheme correlates the '''fund participation''' with the level of direct participation. For more details on the Neurons' Fund, visit this [https://internetcomputer.org/docs/current/tokenomics/nns/neurons-fund/ link]. | |
| − | + | == SNS tokenomics analyzer == | |
| − | + | Use this [https://dashboard.internetcomputer.org/sns/tokenomics dashboard app] to evaluate SNS tokenomics configurations. The tool takes as an input an SNS init file and allows to simulate different levels of direct participation and its impact on key factors | |
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| − | + | * Token Price Range: Displays the potential exchange rate range between ICP and SNS tokens. | |
| − | + | * Matched Funding: Estimates the Neurons' Fund contribution as a function of the simulated direct participation and the overall size of the Neurons' Fund. | |
| − | + | * Token Distribution: Shows how tokens are allocated between treasury, swap participants and the development team. | |
| − | + | * Voting Power Assessment: Provides a visual representation of the voting power across the community (swap participants) and the developer team. | |
| − | + | [[File:SNS tokenomics analyzer visual.png|alt=|center|thumb|900x900px]] | |
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| − | * Token | ||
| − | * Voting | ||
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== Frequently asked questions == | == Frequently asked questions == | ||
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* ''How precisely do the minimum and maximum funding targets influence the swap ?'' | * ''How precisely do the minimum and maximum funding targets influence the swap ?'' | ||
** "The swap fails if the minimum funding target is not met within the swap window. Conversely, if the maximum funding is reached, the swap concludes immediately." | ** "The swap fails if the minimum funding target is not met within the swap window. Conversely, if the maximum funding is reached, the swap concludes immediately." | ||
| + | ** "Please note: The minimum and maximum funding target are specified with respect to the direct participation only!" | ||
* ''What should projects consider when setting the minimum and maximum funding targets?'' | * ''What should projects consider when setting the minimum and maximum funding targets?'' | ||
** "Set a realistic maximum funding target to create scarcity and drive token demand, as reaching this target ends the swap, possibly excluding some participants. A very high maximum can lead to a post-launch price drop, while a very low maximum might limit participation and miss funding opportunities." | ** "Set a realistic maximum funding target to create scarcity and drive token demand, as reaching this target ends the swap, possibly excluding some participants. A very high maximum can lead to a post-launch price drop, while a very low maximum might limit participation and miss funding opportunities." | ||
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** "The minimum dissolve delay is crucial for voting eligibility. It encourages prudent, long-term voting as tokens are locked up. It also offers some defense against attacks, especially those funded by borrowed resources. However, if an attacker gains 51% of the voting power, the minimum staking period becomes irrelevant. | ** "The minimum dissolve delay is crucial for voting eligibility. It encourages prudent, long-term voting as tokens are locked up. It also offers some defense against attacks, especially those funded by borrowed resources. However, if an attacker gains 51% of the voting power, the minimum staking period becomes irrelevant. | ||
| − | == | + | == Further background material == |
| − | * | + | * Overall intro to SNS https://internetcomputer.org/sns/ |
| − | + | * Tokenomics of a DAO: https://internetcomputer.org/docs/current/tokenomics/sns/tokenomics | |
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Latest revision as of 12:30, 20 March 2024
Goal
The purpose of this page is to gather information that assists teams in selecting a tokenomics structure for their SNS DAO. Additionally, it aims to aid potential SNS DAO participants in evaluating the proposed tokenomics configurations of an SNS.
SNS tokenomics set-up
The SNS governance framework is a customizable version of the NNS framework. All its parameters can be set in the SNS initialization file, which also contains a comprehensive guide to these settings. For more detailed information about SNS rewards, please refer to this link.
SNS decentralization swap
In the SNS decentralization swap, community members have two ways to get involved. One is direct participation, where they can exchange their ICP for SNS tokens.
Alternatively, community members can engage indirectly through the Neurons' Fund (NF). The extent of the NF's involvement in a specific SNS swap is decided by the Matched Funding scheme. This scheme correlates the fund participation with the level of direct participation. For more details on the Neurons' Fund, visit this link.
SNS tokenomics analyzer
Use this dashboard app to evaluate SNS tokenomics configurations. The tool takes as an input an SNS init file and allows to simulate different levels of direct participation and its impact on key factors
- Token Price Range: Displays the potential exchange rate range between ICP and SNS tokens.
- Matched Funding: Estimates the Neurons' Fund contribution as a function of the simulated direct participation and the overall size of the Neurons' Fund.
- Token Distribution: Shows how tokens are allocated between treasury, swap participants and the development team.
- Voting Power Assessment: Provides a visual representation of the voting power across the community (swap participants) and the developer team.
Frequently asked questions
- How many and what kind of neurons do you receive when directly participating in an SNS swap ?
- "In an SNS initialization, a project defines the number of SNS neurons and their dissolve delay range. For instance, a neuron basket with 3 neurons and a 1-month interval will result in neurons with dissolve delays of 0, 1, and 2 months."
- How precisely do the minimum and maximum funding targets influence the swap ?
- "The swap fails if the minimum funding target is not met within the swap window. Conversely, if the maximum funding is reached, the swap concludes immediately."
- "Please note: The minimum and maximum funding target are specified with respect to the direct participation only!"
- What should projects consider when setting the minimum and maximum funding targets?
- "Set a realistic maximum funding target to create scarcity and drive token demand, as reaching this target ends the swap, possibly excluding some participants. A very high maximum can lead to a post-launch price drop, while a very low maximum might limit participation and miss funding opportunities."
- What considerations are there when choosing the minimum stake of SNS neurons?
- "The minimum stake is the lowest amount of SNS tokens required for a neuron. A lower value increases accessibility for those wanting to participate with fewer tokens. However, with a technical limit of 200K neurons in an SNS, a very low minimum stake might lead to too many small neurons."
- What should be considered when setting the minimum dissolve delay for SNS neurons?
- "The minimum dissolve delay is crucial for voting eligibility. It encourages prudent, long-term voting as tokens are locked up. It also offers some defense against attacks, especially those funded by borrowed resources. However, if an attacker gains 51% of the voting power, the minimum staking period becomes irrelevant.
Further background material
- Overall intro to SNS https://internetcomputer.org/sns/
- Tokenomics of a DAO: https://internetcomputer.org/docs/current/tokenomics/sns/tokenomics