Dfinity is committed to creating a virtual superhost of the world’s data centers working together.
By understanding the Neuronal Network (NNS), you can not only see how Dfinity enables network governance, you can also get a glimpse of the two most important inflationary and one deflationary models of the Dfinity economic model.
Although it is currently difficult to join a data center to participate in distributed computing, there is no barrier to entry to participate in NNS voting governance as long as you have an ICP to pledge.
This paper will unpack how Dfinity, an Internet Computer (IC), enables decentralized governance by asking five questions.
What does the NNS do?
Why is NNS needed?
How does NNS achieve autonomy?
What roles do neurons, proposals, tokens, and containers play in the NNS?
How do the above four NNS components collaborate for economic governance?
- What does the NNS do?
The Neuron Network (NNS) is a decentralized, Tokenized, algorithmic governance system running in an Internet computer protocol.
It uses neuronal voting motivated by a set of economic models in order to fully express the overall will of the community during system-level adjustments and evolutions (e.g., security and scalability upgrades).
In this regard, system evolution (e.g., protocol upgrades, subnetwork additions, economic model parameter adjustments, etc.) is accomplished by voting on specific proposals, which are proposed, voted on, and executed by neurons in a container (Canister).
Neurons are generated by pledging tokens by participants and dissolve with decompression. Voting contains a very important inflationary mechanism in the economic model – voting rewards minting, while another inflationary mechanism – node service provider rewards, and a deflationary mechanism – burning fuel (cycles) destruction is also in NNS.
- Why do we need NNS?
The Internet Computer (IC) is a distributed protocol run by a network of node computers hosted in different data centers.
Data center nodes need to reach consensus on the state of the IC. The set of nodes involved in the consensus is called a subnet, and each subnet is a blockchain.
Hosted on top of the node communication and consensus protocols is a stateful smart contract, a container (Canister), each of which is a microservice that communicates and collaborates with each other to form software and services in Internet computers.
The state of all containers must be replicated across all nodes. Somewhat similar to the idea of sharding technology, in order to make the Internet computer infinitely scalable, the network consists not only of a subnet, but also of multiple subnets.
In order for the Internet computer to scale on demand, the network must be able to add new subnets (a batch of new nodes) over time as well as new nodes in the subnets to increase the computational power.
This means that a mechanism is needed to organize, track, and manage nodes and subnets. For example, deciding when to add or remove subnets and nodes.
In addition to the reasons listed above, here are some typical scenarios for NNS in IoT computers (more details will be provided later in conjunction with “proposals” and “containers”).
Querying node and subnet information
Updating of IC features and parameters, including the upgrade of the NNS itself
Upgrading protocols and software to avoid forking and breaking consensus
Adjusting the parameters of the economic model.
Such as the exchange ratio of ICP and cycle.
Rewards for node providers.
In extreme cases, malicious smart contracts can be frozen to protect the network and user rights
Upgrading of smart contracts or services
Wallet transfers in the NNS, including the operation of converting ICPs into cycles
- How does the NNS achieve autonomy?
Internet computers achieve governance by means of proposals and votes driven by financial incentives. there are four important components of NNS: neurons, proposals, utility tokens ICPs, and containers.
First, when someone finds that some aspect of the IC needs to be upgraded and adjusted, a proposal is initiated to the NNS. the container in the NNS is responsible for executing the specific governance proposal.
It is divided into two categories, a governance container that initiates proposals and is responsible for voting, and a registration container for nodes to query system configuration information.
The process of proposal initiation is that the initiator P sends a command containing the proposal content and parameters to the Governance Canister, the container in charge of governance in NNS, and then the voting starts after the initiator verifies it.
The system presets a number of polling topics and the parameters they involve. A proposal sets a permission to vote, and neurons with permission will see the proposal in NNS.
The NNS will give the result of the vote based on the number of votes and the weight of each vote. The voting weight of each vote is determined by a combination of the number of tokens pledged in the neuron, the dissolution delay and the age.
Here, voters can choose to vote themselves or to follow the ballot. If the result exceeds the threshold it passes, otherwise it will be rejected. It is important to note that to prevent proposal flooding, the sponsors of rejected proposals are penalized.
A prerequisite for a user to be able to participate in a network vote or initiate a proposal is to have a neuron. A user creates a neuron by pledging a certain amount of utility tokens (ICP) to the neuron.
A neuron is like a proxy for us, representing our will in the network or community.
This pledging process is done by the participant by sending an ICP to the governance container and then the NNS assigns a new wallet address for P to lock this token into a position.
The pledged ICP is like Neuron’s oxygen, pledged to create and dissolved to destroy. Finally NNS creates a Neuron for the participant, which records the participant’s identity information, the number of pledged tokens and the time of the pledge, as well as when the pledge will be unlocked later.
What are all the specific topics of voting, what is dissolution delay, why rewards are delayed to be released, how voting weights are calculated, and what role do neurons, proposals, tokens, and containers play in the NNS respectively?
How do the above four NNS components collaborate for economic governance? We will give it in the second half of the article.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/neuronal-networks-dfinitys-path-to-algorithmic-autonomy-above/
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