KIP-51 PNK Airdrop to PoH users

Hey. I’m unsure of the format, please let me know how to make it more KIP like.

Simple Summary

Airdrop a flat PNK amount to every human registered in PoH.

Abstract

A future date will be set to make a snapshot of PoH users. From that snapshot, an amount of PNK that will be determined in this KIP will be delivered to every PoH user.

Motivation

Recent concerns have been made over the PNK amounts held by some Kleros users. Big stacks does not necessarily clash with the incentives needed to make a decentralized court work, but it creates edge cases. To be specific, around gray disputes in the eyes of the public.

If a holder possesses a significant amount (>10%) of all staked PNK, they can effectively, for highly incoherent disputes (say, 60% A - 40% B), choose whatever ruling that suits them. And even for moderately incoherent disputes, they can, in practice, become a schelling point themselves due to their size. This occurs even with commit reveal in place, because a vote can be predictable accross rounds.

Rationale

PoH is the sybil resistant option of choice because:

  • It’s a product that leverages Kleros as Arbitrator, so it would be a retroactive reward to users that relied on Kleros, hardening the ecosystem.
  • It’s big and decentralized.
  • Many users are familiar with Kleros in some way, and would get them to participate.

The snapshot date is a future date to incentivize more humans to register in PoH in the meanwhile. I don’t see a point on cutting an arbitrary past date for this, since it is hard to exploit (apart from farmers).

Implementation

PNK_AMOUNT = 1_000_000_000_000_000_000_000
SNAPSHOT_DATE = TBD

The human readable PNK_AMOUNT is equal to 1000 PNK.

At the SNAPSHOT_DATE, that will be a future date, produce a snapshot of all PoH registered users. Then, from that snapshot, create a redeemable merkle drop contract that drops PNK_AMOUNT once per PoH registered user. This contract will be deployed in Gnosis Chain, to make redeeming the PNK as low friction as possible. It will also allow these humans to stake in Kleros Court in Gnosis Chain and interact with it, especially, when PoH v2 is deployed there.

Security considerations

It is known that farmers are rampant in PoH. If this is considered to be a serious concern, there are options:

  • One way is to push a HIP that enforces removal of sybils and farmers. Then, only generate the snapshot when some time has been awarded to PoH to clear the sybils.
  • Another way is, if there was resistance or the clearing was not effective, manually curating a blacklist of sybils. This list then would be voted as a middle stage to implementing this KIP.
  • Finally, it could just be ignored and accepted as collateral damage.
3 Likes

Strongly against. PNK is a utility token, holders should (or at least it is what intended) be willing to participate of the courts. This is not free money.
Not all, but a huge part of PoH users are there for the free money, not even caring about descentralized ID. That’s fine, it is UBI feature. But Kleros is the arbitrator, not the donator.

1 Like

It might be better to airdrop with a ratio favored to those who voted for POH DAO (from snapshot) and/or those who vouched for others successfully. Because they are the real persons who care about DAO and deserve an income opportunity provided by PNK. As we can see there are only a few hundred active in POH DAO on the snapshot. This airdrop could encourage more registered humans to participate in DAO and increase POH decentralization. At the same time spread the word of Kleros.

1 Like

How about a very simple filter like airdropping only to the humans who have completed DoDAO’s short Kleros quizz, or another Learn-to-Earn.

Airdropping PNK to people who are not keen/able to take the quizz is not great. They would not make good jurors.

1 Like

First thing. The KIP aims at a further date with the intent of creating a call effect. That will likely increase the number of humans registered, in some way. So, the 15M PNK estimate is low, but let’s go with it anyway.

it’ll more like 20% of humans stake in the xdai court, 5% bridge their 1k pnk to mainnet to help fight the big bad whale(s)

This sector will bridge to the Kleros home chain after V2, where all the activity will take place. 15M/4 = 3.75M PNK that is actively decentralizing.

10% don’t know about Kleros and the airdrop, the rest go straight to happy cowswap.

I agree with this estimate, I’m fine with it. PNK lowering it’s price, lowers the barrier to entry:

  • If whales buy the dip, they will be exposed to more risk since it’s a centralizing motion.
    • Loss of reputation that results in subsequent lower prices.
    • Risk of getting forked out (that will be made easier in V2), so every whale has an disincentive to have huge bags.
  • If small fish buy the dip, that’s actively decentralizing and would fulfill the intent of this KIP, that is, reduce PNK concentration in a few actors that weakens the game theoretical assumptions that allow the system to run smoothly.

There are reasons why most of the PoH humans are not already jurors and most of the PNKs are not already staked

I think, because the gas cost to participate is too high, and the chances to get drawn are abysmal that it’s not gas efficient to even stake. In Gnosis Chain / rollups this is not the case.

The amount is small enough to be affordable by the Kleros DAO, and it has a clear purpose of having an increase in staked PNK against whales, to help secure the protocol.
Say that the amount awarded ends up being 20M PNK. This is 2% of the initial intended amount of total PNK (1B), it’s not significant in the grand scheme of things. Even if only one fourth ends up used as it’s intended, that’s still a huge victory for the KIP. If the PoH humans just overwhelmingly sell the token, say, >80% of them do so without hesitation:

  • PoH will incur reputation loss and other projects will be discouraged to airdrop to them. So they are disincentivized to do so (I will communicate this to them so they understand the risk)
  • PNK price will drop (which is a decentralizing force, as I stated last post)

This is interesting. Can you suggest an specific metric?

An idea:

There’s a base amount
Every vouch gives a 10% (additive) bonus.
Every PoH related vote gives another 5% bonus. (make a list of PoH snapshots)

total = base * (1 + 0.1 * successful_vouches) * (1 + 0.05 * poh_snapshot_votes)

E.g. this human:

base: 1_000
successful_vouches: 2
poh_snapshot_votes: 5

gets 1500 PNK.

I think any “small filter” that requires active involvement will instantly remove >80% of candidates, and not necessarily because they would be bad candidates otherwise.

Other issues with filtering with a quiz:

  • sybils and farmers have a strong incentive to complete it. They know what the answer is so they will complete it for all their controlled sybils
  • organized users will just broadcast the answers to the quiz, so instead of targeting “humans interested on kleros” you are dropping to a significant % of “humans interested in the rewards that copied the quiz from telegram”

I think it’s more interesting to airdrop indiscriminately, and see what happens.

Won’t be necessary for us to build such an airdrop tool since we could have PoH community building it. [Phase 1] HIP-X: Grant to fund a PoH airdrop solution - DAO - Proof of Humanity and UBI

Maybe the quiz is not the best option but I still think it’s better than simply giving the airdrop to all PoH profiles.

If not, it’s almost inevitable that a big % of the airdropped PNK will:

  • Remain without movements, so unstaked.
  • Sold in the market and end up being again in big whales (besides yes, they are running an even bigger risk, but we don’t know if their risk aversion and this might create a good opportunity to DCA and lower Average entrance price even more) or other users with had already received the airdrop.

Some ideas that could be used as filters could be:

  • Make a call explaining the objective behind the airdrop in which attendants get a POAP , which makes you eligible for the airdrop (short claim period + difficult secret word)
  • Combine the quiz with previous ideas (such as the snapshot & vouches) as filters.
  • Use of previous POAPs of PoH community.

In addition, besides being only the 2% of the initial intended amount of total PNK (1B) , I believe the metric of comparing the airdrop with a whole year worth of juror reward (12 million PNK) it’s more important and would not be so logical ( So it will be necessary to lower the amount of PNK in the airdrop or increase the juror rewards).

In the early days, we did airdrop 1000 PNK to all the telegram members and to people coming in physical events (but it was obviously worth way less at that time). The amount of 1000 PNK was decided as it was the minimal stake at that time. If we do airdrop some tokens, it should be enough for people to stake, so that should be 1200 PNK (current minimal stake).

Now to prevent people just getting and dumping the tokens, we could lock those for some period of time and have them unlock only after they’ve been staked for a specific period (we’d need someone to look how easy would that be implement from a smart contract perspective).

With current events related to POH, I cannot support this and will be voting against it.

Maybe now is not the right time. But this could be interesting to do at the launch of PoH V2.

3 Likes

This would be awesome!

I agree that using a combination of factors would be the best approach. We could also apply multipliers.

Example:

People that completed the quiz + registered on POH get 1x
People that completed the quiz + registered on POH + have Kleros POAPs get 1.5x
People that completed the quiz + registered on POH + have Kleros POAPs + have POH POAPs + voted in the POH DAO get 2x

And so on. Of course, we should also strive not to overcomplicate.

We could make a more complex quiz for the Humanity court.

Also, we could also make a small drop first, then see the results before a second or third drop.

2 Likes

Note, this KIP is stalled due to two main reasons:

  1. PoH currently contains sybils. A HIP has been made to counteract this, but progress is slow. Manually filtering the sybils would be time intensive, so it’s better to let PoH take care of the issue.
  2. PoH is lacking an easy airdrop solution. This HIP has been made to propose building one. It’s better to let PoH build the tool themselves so that Kleros DAO or Coop doesn’t have to spend resources into creating the tool.