Welcome to this week’s edition of the RHIZOME Wire!
An AMA with Scott Smiley and Ricky Dodds
Yesterday, in the main ICON Telegram chat room, the ICON Pinas P-Rep team hosted an AMA with Scott Smiley of ICX Station and Ricky Dodds of the ICON Foundation.
The AMA featured a number of exciting and insightful answers, and I encourage you to dig through the entire chat, starting here.
But I also wanted to take some time to pull out what I thought were the most interesting and encouraging answers and dig a little deeper into what they may mean.
Q: For those who don't know, BTP 1.0 is a major technological innovation ICON has been working on that promises to bring interoperability to crypto. Guys, is there anything you can share with us at this time in regards to what other blockchain projects might be the first to pair with ICX?
Scott Smiley: I can say that we already have two specific targets in mind and that development has started for both chains. As I was saying previously, I'm actively trying to grow the number of chains, specifically targeting those with strong economic activity, large dev communities, and large online/social communities. I'm hoping to turn ICON into a community of communities through this initiative. Stay tuned for more details as we make more progress to share
When it comes to BTP and the promise of interoperability, we tend to focus on the technology and the fact it has the likelihood of increasing the amount of activity on the ICON network.
But I do think it’s also important what Scott pointed out. Sure, onboarding and connecting additional blockchains will bring in additional activity. That’s the immediate impact.
Beyond that is the indirect, longer-term impact. And that’s the fact that these other blockchains now have a direct bridge into the ICON ecosystem. Down the road, they may be using this bridge without even realizing it, but being uniquely connected to our chain will greatly increase their interest in our project and the various applications we have operating.
If it becomes much easier for an individual from another community to start utilizing one of ICON’s DeFi products, or an application such as ICONBet, it’s likely that many of them will. And once that happens, they’re part of our community — and most likely an ICX stakeholder as well.
If this thesis is correct, that means simply by connecting with one chain, we could essentially double (at least) the size of our community. And that’s just one chain. Imagine what happens with each addition.
At one point during the AMA, Scott said “My goal is to have ICON connected to more blockchains than any other in the industry by the end of 2021.” If he follows through on that aspiration, just imagine how large the ICON community can be in a year.
(By the way, to hear Scott talk more about BTP and other cool things ICON has in the pipeline, be sure to listen to the most recent episode of the Eye on ICON podcast, where we have him on as a guest!)
Q: March is slated to be an especially busy and noteworthy month for the ICON ecosystem, with many big releases scheduled for arrival, such as DeFi products: Balanced, OMM, and Bridge. How does ICON plan to market these products to both crypto and non-crypto users to capture market share and push for rapid adoption of these core projects?
Scott Smiley: Ultimately I think word of mouth marketing, airdrips and airdrops, and social media campaigns are some of the most effective strategies in our industry. We're in the process of getting more strategic partners as Balanced and Omm launch, and in the end I believe what attracts people to a network/product, and what gets the word spreading, is the opportunity to make money.
Might be a bit blunt to put it that way, but with Balanced, for example, this product is designed to give people the opportunity to earn a profit. The more profitable Balanced becomes for their users, the more people will talk about it and the more they will use it. The more success the platforms garner in their early days, the greater the network effect will be.
I think this is especially important considering the problem that Ethereum is facing right now. For many newcomers who are just now getting exposed to the wave of DeFi products, utilizing Ethereum is almost prohibitively expensive. Let’s say you had $50 you wanted to try out in a DeFi protocol. Well, it probably costs you $20 or so just to make the transaction to do so (and that’s just one transaction!).
Serving as another outlet for people to use DeFi who want to try it out and get involved could be a helpful advantage for the ICON ecosystem. And with transaction costs that are essentially non-existent, along with fast transaction speed, ICON could become a very desirable target for potential DeFi users.
And it looks like the team is trying to pull out all the stops in order to advertise these opportunities:
Ricky Dodds: Additionally, we're looking into opportunities with large crypto focused distribution channels (youtube mainly, but others as well). I've personally spoken with many of the top influencers on these channels and all are interested in what's going on at ICON
This is consistent with a point I made fairly recently: now that ICON has actual products to advertise and promote, that promotion is now underway. It’s not marketing to “buy our token” but rather “come use this cool product to make money.” The latter is easier to get people on board with, in my opinion.
Q: In recent months, there’s been a conscious effort to materially reduce ICX inflation, for the benefit of all ICONists, with i_rep now set at 10,000 (the lowest possible value on ICON 1.0). Given the recent surge of the ICX price, will a further lowering of i_rep (i.e., reduction in P-Rep rewards) be a top priority, beginning with ICON 2.0? Or, will more attention be given to things like increasing tx fees to further help combat inflation?
Scott Smiley: Overall token economics is a major focus for me, but I'd say it's less about i_rep and more about answering this question (might be getting a little too deep here but bear with me):
"How much extra money should I make for running my own p-rep, governing, maintianing the node, etc. vs simply voting for somebody else? What extra return should I get for putting in this effort?"
Should it be an extra 1%? 2%? 20%? That's the question we need to answer on ICON 2.0. There needs to be some incentive to do it, or everybody would sit around voting for other people and nobody would want to run a node.
From there, we can decide overall inflation numbers. My goal is to get baseline inflation at 4% or lower, and make it increasingly difficult to change. Economics should be sticky, people buy BTC because they have certainty in the supply, we need something similar. With more main p-reps, it will be increasingly difficult to change anything on our network. So we'll have some time when ICON 2.0 first launches to see how things go, then try to grow the main p-rep set aggressively to lock things in.
So having said all that, the work that needs to be done is deciding where to allocate inflation. We have 4 things to consider:
- Relayers (They support BTP)
- Contribution Proposal System (money used to grow ICON Network)
I think this is probably the right way to think about this problem. It’s hard to argue that the wealth dispersion between P-Reps and normal voters was far greater than it should have been during the initial phase of ICON’s tokenomics. Especially when you take into account the fact that many P-Reps weren’t doing much, it was clear that change needed to happen.
Determining what exactly the right incentives for running a P-Rep isn’t easy, but answering that question makes it easier to adjust the other determinants of inflation that Scott has listed.
Ultimately, it will be up to the community to decide how much inflation we have, and how much goes toward which category. How much of the generated inflation should go toward P-Reps? How about voters? How much do we need to fund the CPS? How do we make sure relayers are incentivized to help BTP succeed?
There were a number of other interesting questions and answers posed during the AMA, so I encourage you to read the entire thing!