Note: Following is an updated version of the article, accurate as of May 15. Previously, the monthly rewards for P-Rep was inaccurately explained in the second-last paragraph due to a mixup in the editing process. This error has been fixed! Furthermore, we’ve added an infographic, see it below!
ICON has announced some changes to the ICON Incentives Scoring System, or IISS.
The IISS is the artificial intelligence-based system that determines the appropriate share of network rewards given to an individual ICONist based on their relative contribution to the ICON Network.
Or in other words, IISS is the system that determines how much you’ve helped the network and how much you should be rewarded for it.
The updated IISS limits some of the authority previously granted to the network’s Public Representatives, or P-Reps.
These representatives, which include the network’s block producers, were initially imbued with the power to decide the rewards received by other members of the ICON community, including DApps, Ecosystem Expansion Projects (EEPs) and voting ICONists.
The ICON team felt this gave the P-Reps too much authority.
Instead, the team has now pre-determined the reward structure for DApps, EEPs and voting ICONists.
Voters — i.e., ICONists who delegate to P-Reps, DApps and EEPs — will see annual reward rates between 2% and 12%, depending on the percentage of the network that has been staked. The less the network has been staked, the higher the reward rate. The more the network has been staked, the lower the reward rate. The minimum reward rate of 2% kicks in when at least 70% of the network has been staked.
Think of this as like how a central bank raises interest rates to encourage saving. The higher reward rates should encourage more users to join the network during its growth phase. Once the network has stabilized — that is to say, when it’s more fully staked — the lower return rates will encourage more ICX transactions. To use the central bank analogy once again, this is similar to how lower interest rates promote greater spending.
Voters who delegate to P-Reps will receive rewards related to DApps and EEPs even if those processes haven’t been developed at the time of delegation. Which means you get paid right away, even if the DApps or EEPs you’re staking aren’t done yet.
The monthly rewards for DApps (i_dapp) and EEPs (i_eep), meanwhile, have been hardcoded at 25% of the monthly rewards for P-Reps. The minimum value of monthly rewards for P-Reps (i_rep) has been hardcoded at 10,000 ICX.
The ICON team has also added an “un-staking period” of between five and 20 days, depending on the percentage of the network that has been staked. The higher the percentage of the network staked, the fewer the days you need to un-stake. Judging from the graph, the minimum period of two days kicks in at 70% of network staked, the same percentage when the minimum reward rate kicks in.