ICON’s on a roll! Just yesterday, the team announced the official date for staking on August 26th. And now, they’ve released additional updates to the ICON Incentives Scoring System (IISS 2.0), just a month ahead of this momentous date.
To encourage true decentralization, ICON is introducing new incentives model that includes “more details on the penalty system, a new ICX issuance system that creates a situation where ICX can be burned during high network activity, and a change in the transaction fee policy.” Here’s a brief overview:
The penalty system, which is divided into 3 types of penalties (Validation Penalty, Low Productivity Penalty, and Disqualification Penalty), now has a token burning component. For instance, 6% of the delegation toward a P-Rep can be burned if they suffer from a Low Productivity Penalty or Disqualification Penalty. It is thus important to diversify delegation to several P-Reps to avoid the risks of having tokens burned.
Rest assured that burning tokens is unlikely to happen unless an extreme situation arises. As P-Rep candidate ICX_Station pointed out on Twitter:
6/6 The burning penalties are reserved for only EXTREME infractions. A productivity ratio below 85% is unacceptable. If the ICON Network only functions 85% of the time, the network would be worthless.
— ICX Station (@IcxStation) July 25, 2019
ICX Issuance System
Put in place during high network activity, this system mitigates against inflation by burning tokens. Transaction fees will be used to reward the 4 different contributors in the ICON ecosystem (ie. Voters, Representatives, DApps and EEPs). In addition, ICX will be burned if the amount of transaction fees within a block exceeds the amount of ICX necessary to reward all 4 parties.
Transaction Fee Policy
Previously requiring a hard fork, Step Price — the base transaction fee on the ICON network — can now easily be adjusted via a P-Rep consensus on a Network Proposal. This means P-Reps can vote to change the transaction fee. If agreed, the network will then automatically implement the changes.
For all the finer details, such as changes to governance variable and the network proposal, refer to ICON’s full updated Yellow Paper — IISS 2.0.