RHIZOME Interview with BongAn Ha & Changju Lee (Dr. ICON)

Recently, I decided to interview BongAn Ha and Changju Lee of the ICON Foundation. BongAn Ha serves as the Cryptoeconomic Architect of ICON and Changju Lee is the Cryptoeconomic Analyst for ICON. I had a few questions for Bong and Changju and given their specific roles, they were able to provide some great insight into these questions. 

From the community’s perspective, we are familiar with the more traditional roles like business development and marketing. Can you talk about what you do as a cryptoeconomic architect and analyst?

Cryptoeconomic Architect are responsible for guiding the success of a blockchain platform and co-work with the developer team that is responsible for improving it. We sets the monetary policy, incentive system, on-chain governance system, ecosystem strategy and feature definition for an ecosystem. We may also do the writing the whitepaper and yellowpaper, forecasting the future of ecosystem responsibilities. Cryptoeconomic architect is similar in concept to economist and product manager.

Changju, you have a doctorate in financial engineering. Can you give an overview of what financial engineering is, how it’s used in traditional finance (e.g. risk management, valuing derivative products, etc), and how you use your expertise in designing ICON’s economic model?

People who major financial engineering usually become a banker, quant, or risk manager. what they do is using previous financial data to predict what will happen in the future. In this process they could build derivatives and portfolios to maximize the profit and minimize the risk. Recently, the requirements for financial engineer includes data analysis, computer language skills, and micro and macro economics. What we do mostly in ICON is to build economic model that could motivate everyone to participate with limited inflation. With multiple simulation model and hypothesis test, we prevent any abusing activities and maximize the total utility of ICON network.

Can you give a general overview of ICON’s DPoC consensus? Why did the team choose this model, and what advantages does it offer over traditional PoS or DPoS models for ICON’s use case?

DPoC is not consensus protocol. ICON is based on the DPoS consensus protocol. Delegated Proof-of-Contribution (DPoC) is a decentralized and democratized incentive and governance protocol whereby token holders (ICONists) exercise their right to governance through delegating their stake to those that contribute directly to network growth. By delegating their stake, ICONists elect proven contributors to receive rewards from the network, while at the same time reaping rewards themselves by contributing through stake delegation. 

An effective incentive mechanism can greatly expedite the growth and ultimate success of a decentralized ecosystem. The ICON Network utilizes the Delegated Proof-of-Contribution protocol to quantify ecosystem contributions, which allows for a more precise and decentralized distribution of economic incentives. Without an effective system like Delegated Proof-of-Contribution, valuable network resources could be allocated to entities with misaligned or apathetic interests, thus hindering the growth of the network and diluting the token holdings of ICONists that have made valuable contributions to the network. For this reason, the ICON Network focuses on selecting proven contributors through a delegation process.

How far do your responsibilities stretch as cryptoeconomic architects and analysts? Obviously, you are heavily involved in designing the mathematical concepts that govern IISS, but are you also involved in other aspects of the project as well - for example, new token standards like STO, stablecoin, NFT, etc.?

Actually, I am doing several projects in my team. We usually design the backbone of ICON Network. So we usually make a decision to improve the ICON Network much better. That kind of task requires a lot of responsibility. 

Most of the projects I am involved has a strong relationship with designing the ICON Network. I am manager of P-Rep campaign and also I am in charge of the Testnet for P-Rep. It is very helpful to me because those projects give me an insight about the P-Reps, ICONists, and DApps in the ecosystem. I can take away some knowledge and user-understanding from these projects and reflect that things to our platform.

Recently, I’ve seen people ask why ICON doesn’t have a two token incentive system. For example, NEO/GAS, ONT/ONG, VeChain/VTHOR. Am I right in saying that I_score essentially serves as a secondary “internal token” in the ICON ecosystem that isn’t tradeable on external markets like exchanges? If so, what was the thought process behind quantifying contribution for staking in I_score instead of ICX directly.

First, I-Score is just another way to present ICONists contribution during certain period. Therefore, this is not another token in ICX network. By using I-Score instead of using ICX, the ICONists could tell how much reward they are getting and and this could be the evidence of how much work they have done in this network.

Inflation is a topic that comes up a lot in the community channels. I think there is a stigma around the concept of inflation because as a society, we always hear about governments inflating the monetary supply. In the context of ICON, “inflation” isn’t a mechanism where a centralized entity can just decided to print more ICX. Can you share your thoughts on ICX inflation, how the inflation rate is determined, and why it’s a necessary part of the DPoC consensus model.

Inflation was the main concern when we build this model. In ICX-network, new ICX is issued only when is necessary. Unlike other blockchain platform, the inflation rate on ICX network is depends on how much P-Rep think they should receive, entire transaction fee in the network and the amount of stake/delegation rate in the network.  In more detail, P-Reps cannot just submit high number because they could their vote; increase in transaction fee will reduce the newly issuing ICX; high staking/delegation rate in the network could prevent the depreciation of ICX. One of our greatest features is maintaining reward system without any inflation when the transaction fee is sufficient. We do have inflation now because there is not enough DApp in our network, but when there is, there won’t be any inflation.