What to look for in the Contribution Proposal System
Welcome to this week’s edition of the RHIZOME Wire!
The CPS approaches
In the ICON Development Roadmap Update for January, we were given a firm release timeline for the much-awaiting Contribution Proposal System (CPS):
The Contribution Proposal System is in the final stages of code review and will be tested again starting the first week of February. All frontend and backend logic is complete and ready for production. Assuming no more issues are found, we expect to launch the CPS no later than the 3rd week of February. We look forward to bringing this amazing product to the community.
If you aren’t familiar with the CPS, I encourage you to read the prior newsletter I have written on this topic, “The upcoming Contribution Proposal System.” In addition, in the most recent episode of “Eye On ICON,” we took time to discuss this topic in depth (so be sure to listen and subscribe if you haven’t done so yet!).
In the article I just mentioned, I highlighted two key benefits of the CPS, as described in the opening pages of the “Contribution Proposal Paper 2.0”:
The importance of the Contribution Proposal System is two fold. For one, it allows for expedited growth of the ICON Network by giving entities the opportunity to receive funding from the network itself. Developers of decentralized applications and contributors to the growth of the ecosystem can submit their work or plan to the Contribution Proposal System, Public Representatives will vote on whether or not this is a legitimate project, and if approved, this project will be eligible to receive funding from the ICON Network. This system will turn the ICON Network itself into one of the first fully operational Decentralized Autonomous Organizations (DAO).
Secondly, and perhaps less obvious, the Contribution Proposal System plays a significant role in the distribution of wealth and power in the ICON Ecosystem. Many blockchain networks give rewards solely to those that produce & verify blocks, thus centralizing wealth & governance power and giving sole discretion of funding ecosystem growth initiatives to such entities. With the introduction of the Contribution Proposal System, anybody interested in contributing to the ecosystem will have the opportunity to accrue governance power and wealth within the network.
From a big picture standpoint, another goal of the CPS is to transfer the surplus rewards that P-Reps have/had been receiving since the beginning of decentralization away from P-Reps and towards the CPS. Due to a decision made by the community and P-Reps, ICON is moving toward a system where P-Reps operate as node operators and governance participants, while contributions to ICON are to be funded by the new CPS.
Much to my dismay, however, is the fact that thus far only three contribution proposals have been submitted thus far on the ICON forums, the forum where proposals are to be floated prior to submission to the CPS.
With 250,000 ICX being provided to initially fund the CPS, there’s a lot of opportunity for growth of ICON — but only if quality projects are submitted and approved.
As projects start to get submitted and vetted by P-Reps, here are a few things I’ll be hoping for:
Very specific metrics on how the money is being spent
I have seen a handful of ideas for proposals tossed around that include some version of paying for marketing. It also seems like these ideas haven’t been fully fleshed out yet in terms of just how much money this type of marketing may cost. Take, for instance, YouTube influencers. Many of these crypto YouTube influencers charge a pretty penny for mentioning a given token or project. Many ICONists may believe it only costs a few hundred dollars to “hire” one of these influencers. In likelihood, it’s probably somewhere in the thousands. To back this up, here’s a quote from a Multi.io Research report on crypto marketing, released in mid-2020:
The number of crypto and blockchain content creators on YouTube is rapidly increasing, but there have been a few pack leaders with over 100k subscribers who have firmly established themselves as the go-to influencers for promotional purposes. Their rates are currently working out at a CPM (cost per mille, aka cost per a thousand views) of about $500 to $1500. If you look at an influencer’s average views for a video that has been up for a month, if they are hitting around 10,000 views, expect to pay between $5,000 and $15,000.
Does it make as much sense to spend thousands of dollars on a brief video that gets 10,000 views? Maybe. But maybe not. But until we know just how much money it costs to implement these marketing tactics, I’d be hesitant to get enthusiastic about a marketing campaign built in this manner. So it’s my hope that those proposing projects will do the work ahead of time to reach out to target influencers to figure out how much they actually charge before putting forth a proposal.
A diverse array of projects
Contribution Proposals fall into three potential categories:
Infrastructure
for supporting the underlying code base of the blockchain - Infrastructure supporting tools, bug patches, node maintenance tools, etc.
Development
Developer support and product ideas - wallets, block explorers, dapps, developer documentation, etc.
Community Activities
Ambassador activities, public relations, meetups, educational content and activities, and web community development and management
It’s my hope that we see a healthy combination of all the above. I imagine there may be a temptation to flood the CPS with marketing proposals — not only because there’s a lot of enthusiasm for marketing, but also because it’s a skill far more people have (compared to development or infrastructure). I ultimately believe the long-term success of the project will be more aligned with strong projects and a stable infrastructure, but there’s certainly a need for spreading awareness too.
Treating the CPS funds as “our money”
In a certain way, the CPS is money that sort of “belongs” to the community. I say this in the context of the fact that, moving forward, the CPS will be funded by tokens minted by the network — aka, inflation (fortunately, there is a 1,000,000 cap on the amount of ICX that can be in the CPS). While this isn’t new inflation (since it’s essentially the funds that had been going to P-Reps), it’s still inflation.
So, if inflation is providing the funding for the CPS, don't you, as an ICONist, want those funds to be spent in a manner that most effectively helps the long-term success (and thus price) of ICON?
When community members review projects, I hope they’ll think of that funding through that lens. Pretend a proposal required 10,000 ICX of funding. Ask yourself “If that was my ICX, would I want to spend it on this?” “Is it worth it to spend 10,000 ICX for 60 seconds of a YouTube influencer talking about ICON?” I think this line of thinking will help ensure only quality proposals are receiving funding.
Overall, the CPS holds a lot of promise for the ICON ecosystem — but only if the opportunity isn’t squandered or wasted on ineffective or unhelpful projects. I’m hopeful we’ll start to see more proposals come forward over the coming weeks, and I’d encourage the community to make your voice heard about what you’d like to see P-Reps vote to approve!