Neo finally on track to the perfect economic token model in NEO 3.0? Neo Github seems to say so.

Proposed by: saltyskip. Acknowledged by: igormcoelho and erikzhang. The NEO community needs to Vote.Economic Model Adjustments, Consensus Node Rewards and NEO GAS Inflation #326This NEP will propose an economic model adjustment to the distribution of GAS created through mining, system fees, and network fees. Additionally it will propose a permanent inflation to GAS mining in the NEO ecosystem. With these changes it will provide a clearer seperation of concerns between NEO (the governing token) and GAS (the utility token), as well as better align the incentives between the NEO holders and consensus nodes.MotivationLet us first consider three goals of the NEO network protocolGoal 1: Have network fees be low while being resistant to spam attackGoal 2: Effectively reward consensus nodes while still aligning their interests with NEO holders/usersGoal 3: Encourage circulation and spending of GAS within the NEO ecosystemFrom this point on, I will use NEO holders and NEO network users interchangeably, as functionally they are the same group of peopleI have distilled these goals based on discussion located here along with other discussions amongst the community.In the current iteration of NEO, none of these goals are being properly met, but we can work towards achieving them in NEO 3.0.In order to achieve these goals. I propose three necessary changes to the protocol.Action 1: Network fees are no longer distributed to consensus nodes, but instead NEO holders.Action 2: GAS generation does not go to zero in twenty two years but instead asymptotically levels off to a fixed inflation rateAction 3: Consensus nodes collect a percentage of mined gas indefinitely, instead of network feesI believe with these three implementation changes we will be able to effectively achieve the three goals that I have mentioned above.RationaleLow Network Fees and SpamCurrently the NEO network has 0 fees which makes it susceptible to apam. We have already seen spam attacks carried on the test network, and most recently on the main network as well. The natural solution to spam attacks is to​Limit the number of free transactions per block2. Make users attach fees to their transactions attach fees to transactionsThis will generally render spam useless or require the spammer to pay more and more money in order to continue his attack. The problem with this solution is that it HARMS NEO holders and HELPS consensus nodes.Let’s consider an escalation in a fee war between a spammer and the users of the NEO network. As the fees gradually rise, the consensus nodes will continue to get more and more profits while the users of the network suffer. This creates a perverse incentive where the consensus nodes actually have an incentive to spam the network because they will collect all the fees associated with the spam.So in the current iteration of Network fee implementation, consensus nodes and spammers prosper from high fees while users suffer.If we adjust so that network fees are instead paid out to the NEO holders, then the spammer will be paying the network users to continue his spam attack. If the attacker’s goal is to harm the NEO network paying large sums of money to the NEO holders is completely counter productive.Users will effectively be subsidized in a fee war by the spammer, and although it maybe annoying is signficantly less harmful than the previous solution.There is one big problem, in this scenario we have completely removed the incentives for consensus nodes entirely. We will disccuss how to adjust the model so that consensus nodes can still be rewarded in this system later.However, with this adjustment I believe we have achieved Goal 1, which is keeping network fees as low as possible while still being resistant to spam attacks.Asymptotic Gas InflationCurrently as stated in the whitepaper, gas generation is meant to bootstrap the network and distribute it amongst NEO holders, and while this is a good goal, it leads to many problems.In this system GAS becomes a deflationary currency over time. This means it encourages the hoarding of GAS rather than the spending of GAS. We see this time and time again with crypto assets that try to be a “means of transfer.”If something is meant to be used as good means of transfer (utility coin) as opposed to a store of value it SHOULD be inflationary.GAS will not be able to fulfill its main purpose of utility if it is a deflationary currency.To make matters worse, the deflationary nature of GAS is accelerated by not only lost GAS, but also by NEO black holes which continually accumulate GAS, and remove it from the system entirely. We can combat black holes by making sure that the amount of GAS lost to it always remains below the inflation rate. This makes the GAS supply more stable, and disincentivizes users from hoarding GAS. Encouraging users to spend GAS on network fees and system fees (as well as for purchases outside of the network) will, in the long run, be much more positive for the NEO ecosystem.We are extremely lucky to be able to leverage the dual token model to have one asset be used as a store of value, and one asset to be used as a means of exchange. Deflation is good for a store of value, and inflation is good for a means of exchange.Making GAS inflationary solidifies the use case and seperation for NEO and GAS instead of blurring the lines.So by making GAS inflationary we have achieved Goal 3 which is encouraging use and spending of GAS in the NEO ecosystem.Consensus Node RewardsWith inflationary gas we can now effectively reward consensus nodes without ever putting them in conflict with the users. Consensus nodes can now be rewarded with a fixed or percentage amount from the mined GAS, so that they are always incentivized to keep producing blacks, and the network stable because that is their only source of income.They do not have to worry about any sorts of fees, and are encourage to maintain a passive role in the ecosystem. They will be encouraged to find the best ways to keep block times low, and network uptime very high which also benefits users. Thus we have achieved goal #2 of effectively incentivizing consensus nodes without having any conflict between them and the users.Finally running consensus nodes has as fixed cost associated with it. It should have a fixed reward as wellSpecificationThe main parameters we need to consider are the inflation rate, and the ratio of mined gas that is split between the consensus nodes and NEO holders. However more discussion is needed about the proposal at hand before these parameters can be consideredEdit: Added erikzhang

Submitted April 23, 2019 at 10:53AM