The purpose of the Network Nervous System (NNS) is to allow the Internet Computer (IC) network to be governed in an open, decentralized and secure manner. It has complete control over all aspects of the IC network. For example, it can upgrade the protocol and software used by the node machines that host the network, it can induct new node operators and machines into the network, it can create new subnets (special blockchains) to increase network capacity, it can split subnets to divide their load, it can configure economic parameters that control how much must be paid by users for compute capacity, and in extremis it can freeze malicious canister software (smart contracts) in order to protect the network, and many other things. The NNS works by accepting proposals, and deciding to adopt or reject them based on voting activity by “neurons” that network participants have created.
Neurons are also used by participants to submit new proposals. After submission, proposals are either adopted or rejected, which can happen almost immediately, or after some delay, depending upon how the totality of neurons vote. Each proposal is an instance of a specific “proposal type”, which determines what information it contains. For each type of proposal, the NNS maintains a corresponding system function, which it invokes whenever an instance of the type is adopted. When a proposal is adopted by the NNS, it invokes the corresponding system function by drawing information from the proposal’s content to fill the parameters. Each type of proposal belongs to a specific “proposal topic”, such as “#NodeAdmin” or “#NetworkEconomics”, which determines details about how it will be processed. To prevent users spamming the NNS, a fee is levied on the neuron that submitted a proposal if it is rejected.
The NNS decides whether to adopt or reject proposals by watching how neurons emit votes. Anyone can create a neuron by locking balances of “ICP governance tokens”, a special native utility token that is hosted on a ledger inside the NNS. When a user creates a neuron, the locked balance of ICP can only be unlocked by fully dissolving (“destroying”) the neuron. Users are incentivized to create neurons because they earn rewards when they vote on proposals. Rewards take the form of newly minted ICP that are created by the NNS. The quantity of ICP rewards disbursed to a neuron derive from such factors as the size of the locked balance, the minimum lockup period remaining (the “dissolve delay”), the neuron’s “age”, the proportion of possible votes it has correctly participated in, and the sum of voting activity across all neurons, since the overall total rewards disbursed is capped and must be divided.
Each neuron has a currently configured “dissolve delay”. At any moment, this determines how long it will take to dissolve if it is placed into “dissolve mode”. Once a neuron has been placed into “dissolve mode”, its dissolve delay falls over the passage of time, rather like a kitchen timer, until it reaches zero, whereupon its owner can perform a final action to make it dissolve completely, and unlock the balance of ICP. The dissolve delay creates an economic incentive for neuron owners to vote with a view to maximizing the value of their locked ICP balances at a future date. Since the price of ICP is a proxy for the success of the network over the long term, sans short-term volatility, this creates an economic incentive to vote in the best interests of the network. Neuron owners can freely configure higher dissolve delays, up to a maximum delay of 8 years, but cannot configure lower dissolve delays. The NNS pays higher voting rewards the higher the dissolve delay, encouraging users to enter a game in which an economic incentive is created to vote according to a very long term vision.
Neuron owners may find it hard to manually direct voting on every proposal submitted to the NNS. Firstly, large volumes of proposals may be submitted to the NNS, often at awkward times, and owners may not be available or have the time necessary to evaluate each one. Secondly, neuron owners may lack the necessary expertise to evaluate proposals themselves. The NNS uses a form of liquid democracy to address these challenges. For any proposal topic, a neuron can be configured to vote automatically by following the votes of a group of neurons, voting to adopt proposals whenever a majority of the followees vote to adopt, and voting to reject whenever that becomes impossible. A catch-all follow rule may also be defined to make a neuron vote automatically on proposals with topics for which no follow rule has been defined. It is assumed that neuron owners will manage how their neurons follow other neurons in the best interests of the network, which is also in their own economic interests, owing to their locked ICP balances.
It is expected that a large proportion of the overall supply of ICP will be locked in order to earn rewards. This secures the Internet Computer network’s governance, by making it both difficult and exorbitantly expensive for an attacker to acquire a sufficiently large stake to gain significant influence. Since neuron owners will wish to maximize their rewards by voting on all proposals, most neurons will either be actively managed, or configured to follow other neurons so they can vote automatically. In practice, once trusted neurons have voted on proposals, a majority of the other neurons will also vote as the result of cascading follow relationships. This means the NNS can usually quickly determine whether a majority of the overall voting power represented by all neurons wishes to adopt or reject a proposal, and decide on the proposal accordingly. However, the NNS cannot rely upon obtaining such a majority, since in principle, neuron owners may not define follow rules, or simply choose not to vote.
When the treatment of a newly submitted proposal is not quickly decided by a majority of the overall voting power, the NNS must use a technique once described as “Wait For Quiet”. This involves deriving a measure of “voting noise” from the volume of ongoing voting on a proposal, and waiting for it to fall below some threshold (which value is a tuning parameter that the NNS can modify in production according to experience), and then proceeding to tally the votes received that far to decide. Different algorithms can be applied, but most simply, the NNS can use a running average of the votes received every time interval as the measure of “voting noise”. If the threshold is too low, an attacker can delay the NNS from deciding on proposals by voting just as the “noise level” is about to fall beneath the threshold, and it cannot be made too high, or else an attacker might try to DoS the NNS so that it decides on proposals using only a small proportion of the voting power that wanted to participate (since it equates their not being able to vote, with their not wanting to vote). Using Wait For Quiet, the NNS can decide on proposals without need for a quorum of voting power to participate, and it can also always decide upon proposals in a timely manner.
The 'governance' module contains the canister (smart contract) that manages neurons, proposals, voting, voter following, voting rewards, and the code necessary to execute accepted proposals.
Function to submit a proposal for an external update from Rust code.