By now, you’ve probably heard of Internet Computer (ICP), the blockchain project that shot to fame faster than a rocket at a space launch. Launched on May 10, 2021, ICP quickly gained a market cap of $45 billion within two days. Yeah, you read that right—two days. Initially, the project announced a maximum supply of 469,213,710 ICP tokens. Fast forward to September 14, 2023, and the total supply has bumped up to 505.8 million ICP tokens.
So what’s all the fuss about? ICP aims to not just ride the blockchain wave but to fundamentally change the way we view and interact with the internet. Sounds audacious, doesn’t it? Well, it is, and that’s just the tip of the iceberg. Managing this bloating supply of ICP tokens is a complex system, governed by the Network Nervous System (NNS).
NNS takes the lead in implementing both inflationary and deflationary mechanisms to handle the ICP supply. On one hand, it rewards ICP holders and node providers for active participation in the network. You stake your tokens, you get rewards. Simple, eh? But here’s where it gets interesting. These rewards are not a one-size-fits-all deal. They depend on a range of factors like the amount of ICP staked, the age of the neurons (yes, neurons, not a typo), and other tricky variables. In essence, the more involved you are, the more you’re rewarded.
The rewards are twofold: Voting Rewards for governance participation and Node Provider Rewards for, you guessed it, providing nodes. What makes this even more gripping is that the inflation rate isn’t static; it starts at 10 percent and gradually adjusts to 5 percent over time. This seems like an intelligent way to get node providers and neuron owners to lock up their ICP by staking them.
The ICP token isn’t just for show and tell; it has an actual role in the ecosystem. It’s used for governance through the NNS and can be converted into something called “cycles,” which are essential for fueling smart contracts on the blockchain.
Now, it’s not all rainbows and unicorns for ICP. The project has been on the receiving end of some serious flak. Critics have questioned its rather grandiose ambition to replace the entire internet. There’s also skepticism around the concept of a singular Internet Identity for users, which poses potential risks to online privacy. Then there’s the matter of the NNS having a bit too much power in decision-making, which has raised eyebrows. To add fuel to the fire, ICP isn’t entirely open-source, a deviation from the norm in the crypto world, raising questions about its ultimate intentions.
But what does all this mean for you? Well, if you’re thinking about jumping on the ICP bandwagon, these are points you might want to ponder. The ICP ecosystem has been designed to reward long-term commitment and active participation. However, critics argue that it still has a long way to go to truly democratise the internet as it so boldly claims. Either way, ICP is definitely a project to keep an eye on; whether it’s a sinking ship or the future of the internet is a question only time will answer.
