[Discussion] New PRV utilities

[maisie]

What a wonderful idea!

At first we suggested to burn the fees because it is fair when the funds do not serve any purpose but preventing the spam and reducing the circulating supply. Your idea is great for the community. Let’s see how others view this suggestion.

[maisie]

@xlsm142857

This will make it harder for beginners to swap for the first time, unless the tap gives the first 0.1 PRV

When a beginner takes his/her first step entering Incognito, he/she has to deposit (or shield) funds to Incognito before using any supported services anonymously. Once the shielding transaction succeeds, there will be an airdrop of 0.3 PRV.

@xlsm142857

I don’t think it’s the best problem to solve right now.

There is no guarantee that spam will not happen in the future with such a low network fee. To make it clearer, after this, the network will collect 0.1 PRV (~ $0.02) per transaction. It is believed to be affordable, not to be an obstacle to grow the network.

[Linnovations]

Hi @maisie, I have the following questions:

1. What does a spam transaction look like?
2. Can you (or the Incognito team) please share data on the severity of the spam transaction issue. E.g. Share data on the growth of spam TXs over the last 12 months?
3. Can Incognito identify wallets that are propagating spam transactions?

[Linnovations]

Here’s an IDEA to combat spam

Another way to combat spam would be to apply a Maximum Daily TX Limit to all wallets (E.g. My guess is 1000 pers day, but perhaps a better approach would be to analyze the average daily TX volume on the highest traffic days and us that as the Max.)

If spammers wants more TXs they have to per an additional fee in PRV to add 1000 more TXs that will expire in 24 hours (or something to that effect).

That Fee will be treated like all other fees ~5% go to validators & ~95% burnt.

But if you saw my previous comment (scroll up)… it’s a shame to burn so much of the fee.

I propose having 50% of the fee to go into a Community DAO Fund (rather than burned) so if spammers want to spam, they will be funding our Community DAO in the future.

[abduraman]

@maisie

@abduraman

So PRV’s final supply “never” will reach to 100M, won’t it?

Max supply of PRV is 100M and will be minted over time. This number is unchangeable.

Hey @maisie ,

I didn’t mean the max supply. Ofc, it will be 100M. I meant final “usable” supply. Since some PRVs will be burnt, after the mining ends (many years later), we will have a circulating supply less than 100M. Otherwise, PRV won’t be deflationary and the burning won’t have any meaning. Am I wrong?

[abduraman]

@PilevinA

you @abduraman are calling us a value that is not at all in the subject

1) What

[PilevinA]

You have a good website)))

[xlsm142857]

If there will be an airdrop of 0.3 PRV after depositing assets, I think it is a good proposal. This is to avoid spam transactions. With the current price of PRV, such a network fee is acceptable. If the price of PRV increases, the network fee may need to be adjusted, otherwise the high network fee will also lead to fewer users trade.

In addition, I think it is possible to take a snapshot of users who have already deposited assets and airdrop them. Users who are currently using Incognito are also considered active users. Airdropping these users may increase the transaction volume of Incognito, achieve the possibility of burning more PRV, and improve the network security of Incognito

[maisie]

@Linnovations

What does a spam transaction look like?

A spam transaction is usually one with a very very small amount and has a meaningless purpose. In fact, a privacy transaction needs more mnemonic than a non-privacy one. Once executing a spam transaction, the network validators need to store the data on their disk drive forever, and a number of rewards will also be paid for them. Likewise, the Incognito blockchain records the information permanently. So the point is not only about how many spam transactions are causing irritation but also about relieving the validators’ storage and on-chain data. A ‘maximum daily tx limit’ won’t help to solve the problem of storage if most of them are still spam.

@Linnovations

Can you (or the Incognito team) please share data on the severity of the spam transaction issue

Unfortunately, the data on Incognito blockchain is private and the team is not capable of knowing or showing you the number of spam Txs or who is propagating those. You can only check the number of total Txs on the explorer here. All the data is on-chain and can be accessed anytime but we can not distinguish which one is actually spam.

@Linnovations

I propose having 50% of the fee to go into a Community DAO Fund (rather than burned)

I have answered this with an approving viewpoint. We need to wait for others’ opinions, too.

[maisie]

Yes, you’re right. After the mining ends, the circulating supply will be definitely less than 100M.

[Jared]

To go a step further, if we are trying to limit excessive TXs on the blockchain we should consider setting a swap limit on the app. Trades under X won’t be allowed. Where X could be $1 or whatever is decided by the community.

The only reason I can think of someone needing to swap small amounts would be to eliminate “crypto dust” from their wallet. This can be handled by adding more of that coin and swapping all at once instead of a bunch of small TXs.

Don’t think small <$1 TXs are an issue? The following screengrabs are just some of the TXs for December 8th, 2022:

*Data pulled from Incognito Explorer (explorer.incognito.org)

There are plenty more TXs just like those mentioned. This results in inflating the blockchain size as each of those TXs are permanently stored on the Incognito blockchain.

The current blockchain size for both Beacon & Shards is at (see breakdown below):

Data	Size
Beacon	52.6 GB
Shard0	17.0 GB
Shard1	9.7 GB
Shard2	7.6 GB
Shard3	9.8 GB
Shard4	12.7 GB
Shard5	8.1 GB
Shard6	8.6 GB
Shard7	31.6 GB
Total	157.7 GB

[abduraman]

@Jared

|Shard7|31.6 GB|

What I understand from the table is that I shouldn’t be validator for Shard 7

@Jared

To go a step further, if we are trying to limit excessive TXs on the blockchain we should consider setting a swap limit on the app.

I sometimes use StarkNet (ZK-Rollup L2 network over Ethereum). As I see, they do not store rejected swaps (generally, failed smart contract executions). In fact, they even do not cut gas fees from such rejected transactions. OK, not cutting gas fees in our case would increase spamming. However, not storing rejected trade txs or storing them in a minimal way as much as possible or keeping them in RAM of the fullnodes for 15-20 minutes may lessen the storage need.

[abduraman]

Let’s go back to the topic.

Here is the new PRV utility: Eliminating %0.3 privacy fee when unshielding for the validators

So once someone stakes 1750 PRV, she will be able to unshield its assets without %0.3 privacy fee which I hate I know FTX has a bad reputation but it had a feature I liked so much. Once the user stakes some FTT, the user could withdraw Ethereum assets to Ethereum network at no cost (a limit existed per day). In our case, Incognito will still cut gas fee but not privacy fee.

[Jared]

@abduraman

In our case, Incognito will still cut gas fee but not privacy fee.

That’s an interesting idea, Nexo does the same thing if you hold X% amount of their token. They give 5 withdraws and cut trading fees.

[nickvasilich]

@maisie

we

As mentioned, increasing transaction fee is to prevent spam transaction and strengthen the network. Incognito has to choose between low fees and the inconvenience of spam. For example, a block is limited to 100 transactions, there are 8 shards, each transaction costs 0.1 PRV. So 100 x 8 x 0.1 = 80 PRV is needed to spam the network. Meanwhile, with the proposed network fee, a real user only needs to pay 0.1 PRV (~ $0.02) for a transaction so it won’t impact to user experience I think.

exactly this is the same for an active user (not a malicious user)

100 transactions are worth 80 PRV (~ $16 today) and with ATH price it’s $(ATH)*80

Let’s say PRV recovers to ~$2, so 100 transactions cost ~$160.

is not that too much for 100 transactions?

Also, if someone has on purpose to spam the network and there’s only a 100 transactions threshold for that, it’s not a big deal to pay $16 for now. Literally, I can’t connect the increasing of a commission to 0.1 PRV to prevent spamming the network and I don’t think this straightforward proposal to 0.1 PRV fee is a reasonable solution now. Maybe there should be more input on that.

Again, such a decision should be backed by a detailed economic rationale, not just by telling that there’s a trade-off to select one evil instead of another.

[yoo]

When I started with incognito the fee was something like 0.000000001 PRV, which was understandably way too low, it dropped some zeros in a later update and there was an option for low, medium, and high priority trades - with medium & high priority costing more (in PRV).

• I assume those “spam” trades are done outside the app.
• As some who likes to make “a lot” of trades I feel setting a fixed 0.1 PRV is way too high.

With that background, how about having trades done within the app have a “huge” discount. If you want 0.1 PRV, then 0.1 PRV for non-app trades, and 0.01 PRV for in-app trades?

I’d also love to see the non-app trades being set to low priority (not a fee discount), but in-app trades get priority action as they are being done by a real person, in real time (and are much likely to be upset when their trades fail, especially knowing how many bot/automated trades are happening - and why should bots get every arbitrage win?).

[Linnovations]

@xlsm142857

In addition, I think it is possible to take a snapshot of users who have already deposited assets and airdrop them. Users who are currently using Incognito are also considered active users. Airdropping these users may increase the transaction volume of Incognito, achieve the possibility of burning more PRV, and improve the network security of Incognito

I the idea above.
If the TX fee is increased, please airdrop PRV to folks with deposits on the platform or have fund in Liquidity Pools or in Provide, as they are helping to support the network.

[Linnovations]

@Jared

That’s an interesting idea, Nexo does the same thing if you hold X% amount of their token. They give 5 withdraws and cut trading fees.

Love this idea @Jared.
The incognito Network could reward users and stakers with XX number of Fee Free transactions each week/month.

[Linnovations]

@Jared

The only reason I can think of someone needing to swap small amounts would be to eliminate “crypto dust” from their wallet.

Hey @Jared , could another reason for swapping small amounts be due to slippage (as depicted as the “Price Impact” % in the app) getting too high when they swap trade large quantities?

I’ve done this on a few occasions because I just didn’t want to be hit with a 16-25% price impact, so I lowered the amount I wanted to swap and spread my trades out.

[Jared]

@Linnovations

I’ve done this on a few occasions because I just didn’t want to be hit with a 16-25% price impact, so I lowered the amount I wanted to swap and spread my trades out.

At what amounts did you trade to avoid the slippage?

I did a trade yesterday and was able to avoid slippage at $20.