Thanks for the feedback on the decaying capital gains tax @Slimchance. I’m realizing now that our ideas are different enough that I’ll post a more fleshed-out description in its own thread so as not to distract from the conversation here.
For now, I’ll acknowledge that you are correct that a decaying capital gains tax could make the bonding curves less sensitive to short-term information changes, but that ultimately as protocol designers we’ll have to decide over what time horizon we want to maximally reward correct predictions.
I actually think @Ohmyjog’s observation that Curation (and also Delegation) can be modeled as Continous Organizations is a very astute one. The settings are very similar, and how we’ve been thinking about these mechanisms at E&N, irrespective of the suitability of all the specific design choices that the Fairmint team made. It’s worth noting that the BlockScience team (who is also working on The Graph) audited the Fairmint continuous organization design and the “initialization phase” is very similar to the “hatching phase” that BlockScience specified in Augmented Bonding Curves, which I describe in this thread.
My thoughts on the proposed dynamic curation tax/“reverse auction”
- I generally agree with the critiques that the above is overly complex relative to what it accomplishes and, given that this mechanism only focuses on initialization, simpler designs are available such as a flat bonding curve during a hatching/initialization phase as referenced by @Ohmyjog and in the thread, I linked above. (I believe your critiques of a flatter bonding curve @Slimchance were in reference to a permanently flatter bonding curve and are valid in that context)
Additionally:
- The high taxes in this design impose a large deadweight loss to the system and discourages important protocol actions, specifically:
- 20% tax for subgraph deployers is too high. There is currently a proposal to reduce the curation tax which is based on feedback that the tax might already pose too large a cost on subgraph developers and could disincentivize migrating to the decentralized network from E&N’s hosted service.
- Near 100% tax for Curators would also strongly disincentivize Curation during that early time period, which could be desirable in some contexts, but perhaps not in others (for example if the deployed subgraph is an upgraded version of a named subgraph that already has good reputation and Curators had already previously reviewed previous versions of that named subgraph or other subgraphs by that developer).
- Introducing a Curator fund controlled by a DAO at the core protocol level expands the governance surface area and goes against one of the governing principles of the network: progressive minimization of governance surface area.
- Front-running, pump-and-dump, and sandwich attacks can happen at any time, but this design only addresses the initialization of the bonding curve, so would need to be paired with something like batched bonding curves, separate in/out curves, decaying curation tax, etc. to be effective, at which point the marginal value of the additional complexity introduced by this mechanism is reduced even further.