Is sICX a Balanced product?

sICX is brilliant ~ The versatility it brings to ICX is so important to our Defi spaces. I first heard about it leading up to the Balanced launch, and assumed it was a Balanced product. Though it is just as integral to Omm and Optimus. Is it a Balanced product?

I know there has been a lot of work migrating everything to Java, so do we need to do that for sICX too? Are we responsible for the sICX contract upkeep and maintenance?

1 Like

Hey @AwaxJago - good question, admittedly it’s not very clear. The original plan with sICX was to have it be only a Balanced product, but then the Omm team was interested in something similar, so decided to just use the same token.

sICX is now operating as essentially a public utility staking pool, where any user can have their ICX staked in the sICX smart contract and get auto-compounding staking rewards, with or without using balanced. It reminds of of LIDO products like stETH, from which they do generate quite a bit of revenue.

So to get back to your question:

Currently, it’s not, and I say that because Balanced doesn’t directly generate revenue from it, however it does take quite a lot of Balanced resources to maintain. It probably set the java migration back about 1-2 months because of a critical (and hard to find) bug occurred along with needing to spend time/resources on the migration to java itself. So Balanced devs had to focus on sICX specifically for a while to fix this and migrate to java.

Curious your thoughts, but I came up with a few ideas as I was typing this:

1.) Continue as-is, working on sICX without a direct benefit to Balanced (albeit maybe there won’t be a lot of specific work on it going forward)

2.) Apply for CPS funding possibly? This would be to continue to maintain sICX, haven’t really thought this through

3.) Make some revenue off sICX somehow (haven’t put deep thought into this either, maybe some staking rewards or something for the DAO)

2 Likes

Since the heavy lifting has been done and now that Java migration is finalized I think another way forward can be just explaining to other DAOs (Omm and Optimus) the value of sICX, that Balanced DAO maintains it and then asking nicely for a reasonable contribution that could be paid in small monthly payments for x time.

So each contributing DAO could vote if they agree. Considering the reputation Balanced has built I think there’s a good chance that the work put on sICX gets rewarded.

1 Like

Since sicx was developed by balanced and also maintained why not have a small percentage of sicx revenue paid out to staked baln. Which will ultimately bring another use case for baln stakers. The more reasons to stake the better for baln in the long term

1 Like

Downside of sICX staking rewards going to Baln holders is that it very much dimishes its usecase.

On the other hand… it takes such an important place in the current ICX ecosystem… I think it would be a big blow to the ecosystem as a whole if it wouldn’t be maintained.

One of the main points of the CPS funding is for the community as a whole to sponsor important infrastructure, so imo sICX would definitely qualify there.

Option 4 could maybe be for a small team to go the P-rep route. (dont know effects there money wise though).

Just realised i read somewhere the foundation has also helped on the Balanced Java Migration… That might also be interpreted as the foundation doing its part in supporting sICX?

1 Like

Something small for example 0.5% doesn’t diminish its usecase. Users have instant unstaking if they want which is a major plus side and why ppl will still choose to have sicx regardless

I think the route of generating revenue directly of sicx would just hurt the eco system. However having sICX governed by a big DAO in the icon ecosystem is quite good and should probably be kept. If not giving the full responsibility to the foundation or something.

One thing we could do is to make instant unstaking native to the sicx contract. Basically just moving the logic from dex, but would make it really simple for other products to provide instant unstaking where balanced get the fees.

We already have this but as we get more products on icon it might not be as desirable to add an additional depenancy(balanced dex) to you contract stack.

So in short by moving the instant unstaking logic we can control the native instant unstaking solution for sicx.

Can also be other product that we can extend and get fees from by owning sicx. Something like flashStaking/flashUnstaking for arbitrage solutions. More things might come up during the btp era where owning the minting of sicx can be really powerful.

2 Likes

I think other apps already can provide instant unstaking, calling the DEX contract is no different than calling the sICX contract, I don’t see why they need to be together. Additionally, instant unstaking is a DEX feature, something that can’t be done without:
a. Balanced incentivising liquidity for it in the sICX/ICX queue
b. the market supplying liquidity for it
It cannot be ‘built’ into the sICX contract because the contract cannot violate the base staking mechanism of the ecosystem of ICX, its economics that allows instant unstaking.

However this does highlight that instant unstaking is one of the better revenue streams currently for Balanced. Perhaps a better capture of that can help reduce the burden of maintaining sICX.

3 Likes

Moving the logic only matters from a development perspective. Also it would not be to the sICX contract. The sICX token itself is really very simple. Its the staking contract that contains the actual logic and the part that is “hard” to maintain. It is probably also the staking contract that is up for discussion here.

So meaning is the dex really has nothing to do with instant unstaking either. basically product like omm to integrate the instant unstaking would just be slightly more simple. If we add staking/sicx and a separate balanced product it would be easier to “sell”. This is also the product we then could extend with whatever ideas we come up with. But right now moving the logic is just an extra cost since it already exists and is working.

1 Like

The point I am trying to make is, forget the contract, instant unstaking doesn’t work without Balanced (or someone elses) incentives.

2 Likes

sICX is closely connected to the core feature of Balanced and therefore already, in the current form, adds value to Balanced. Getting direct revenue from sICX would be great of course but I think we should be carefull about touching the staking rewards. Even a small percentage damages the concept that if you hold ICX, you might as well stake it on Balanced. It could be build into the contract however and set to 0 (managable by the DAO). Basically planting a flag on sICX. Haven’t put deep thought into this however.

Another random thought, but currently sICX default delegation is split amongst top 100 nodes, many of which are not even operating a node and not even bonded. Maybe there can be a whitelist of nodes that contribute to sICX (through development or through utility) to help incentivize development of it. Curious others thoughts.

cc @Chiel @arch @AwaxJago @Andell @Christopher @Uglyrage @RooK5677

2 Likes

I think applying for CPS funding should be the way forward. Definitely think it makes sense for the Balanced team to be compensated for maintaining sICX.

I definitely don’t think option 3 should be opted for as it kind of defeats the purpose of sICX and also some might see this as a cash grab and be unhappy. The whole selling point of sICX is that you can use your ICX on these protocols without losing staking rewards. I’m not sure how well it’d be received if part of those staking rewards were suddenly directed elsewhere.

Given how important sICX has grown to be within the ICON ecosystem (and I expect it’ll grow even further), I think it’ll be approved by a landslide if it was put through CPS. The proposal could outline the estimated costs of maintenance etc. and ensure that the dev team responsible for maintaining sICX are properly compensated for their efforts

I feel altering just the default allocation has a weird feel to it, while there are platforms that do assign votes, like OMM. Also it turns a feature, like allowing BALN to assign collateral votes, to indirectly reduce the allocation towards development of sICX.

Additionally, it feels like something like that only has a tangential relevence to Balanced. With votes towards nodes that contribute to sICX, technically, could be worse for Balanced. If those same nodes are contributing to Balanced, having an incentive to divert resources to sICX, means indirectly resources that potentially could be devoted to Balanced, are not.

I guess my point is, if the maintainers of sICX are not being properly compensated, they should be, and that would be a reasonable way for them to compensated. However that would be an action unrelated to Balanced, and inappropriate for Balanced to comment on.
If the issue is, maintainers that would contribute to Balanced are already being appropriately compensated, but maintaining sICX is reducing Balanced development speed, then I don’t think changing the vote allocation solves that.

That said, assuming its the first issue and its appropriate for a Balanced holder to comment on, I don’t see an issue with the measure as it definately does not feel unreasonable.

@Simon staking rewards is just one way to monetize. Whoever receives the delegation is also an important factor. I mention it in another idea at the end of this post.

@RooK5677 I wouldn’t say the heavy lifting has been done. sICX is not much of a product, it could be a lot better. Refer to stETH (and others) for LIDO. Check out mSOL through Marinade Finance for Solana. These are full blown genuine products with teams around them. sICX has a long way to go to being productized. The reason it’s not is because there’s no incentive for the team to make it better. Maybe I’m just a capitalism maxi, but incentives make good products.

I totally understand where you’re coming from, but tbh staked BALN holders aren’t going to be the ones working on sICX (or balanced for that matter). Based on our numerous conversations, I’d assume you’re a large BALN staker. Ask yourself, if you start getting sICX benefits as a BALN staker, are you going to learn to code and start contributing to building a user interface, fixing bugs in the smart contract, upgrading it when slashing is activated on the ICON network, etc.? BALN stakers currently get a benefit from sICX through the sICX/ICX pool.

There’s a difference between investors/stakers and people who have the skillset and incentive to work on the project. Somewhat of a learning experience for me over the last year or so.

@Andell is it good for the ecosystem that sICX currently delegates to registered nodes that don’t even secure the network? Right now, it goes to top 100 nodes as a default. The purpose of rewarding staking is using network inflation to pay for the security of the network. sICX is earning rewards for not even securing the network.

There will be fixes that need to be done and adaptations for future changes to the network, I’m sure. Who would take care of this and why? I think not having it monetized, with nobody caring much about it, is much worse for the ecosystem.

It’s not about whether or not it adds some value to Balanced. I agree it does, just like Balanced adds value to GangstaBet because it’s the only place to trade GBET, but GangstaBet doesn’t contribute to building Balanced. The key thing is, who will contribute to this and why. Many people benefit from it, but somebody (or group) needs to directly benefit from making it better and growing its adoption, otherwise it will be tragedy of the commons and stagnate.


Through all of this discussion I’ve become more convinced that somebody needs a direct incentive to make sICX better, whether it’s the current Balanced DAO builders or some other group. I can think of 2 ways to do this, though open to other suggestions:

1.) Use some portion of the delegation to delegate to the nodes of the workers contributing to sICX (can be many nodes)

2.) Use some portion of staking rewards to compensate those that work on sICX

I originally had the idea of using CPS money, but this is not incentivize anybody to grow sICX, make it better, etc. It incentivizes the bare minimum. There would be no reason to care about how many users sICX has, how good the UX is, etc. with CPS grants. So it’s still an option, but my least favorite option.

1 Like

This sounds fair, although I would use a monthly bnUSD cap for these tasks. So from all the sICX delegations a variable amount of rewards is converted to achieve this monthly fixed bnUSD target.

I would also encourage that the selected nodes that will maintain sICX won’t get distributed evenly but have a discord to coordinate and distribute that bnUSD in variable proportions so the ones that contribute more get more bnUSD.

And if someone wants to do something big with sICX could go to CPS maybe?

The rest of the delegations could flow back to remaining nodes maybe? (I would exclude non bonded nodes).