Managing Neurons in the NNS Dapp: The ONLY Guide you Need

Geoffrey Miller
Geoffrey Miller
Managing Neurons in the NNS Dapp: The ONLY Guide you Need
Table of Contents
Table of Contents

Welcome to the Network Nervous System decentralized application (NNS dapp). This powerful user interface combines an ICP wallet feature with an incredible variety of staking and governance options. New options are added frequently based on the community's collective will, so be sure to bookmark this guide and revisit it often to check for updates.

Getting Started

To access the NNS dapp, you'll need an Internet Identity.

Before exploring your options in the NNS dapp, it's also vital to acquire a basic understanding of the NNS itself. You can think of the NNS as the brain of the Internet Computer. Using the NNS dapp, you can stake some of your ICP to create neurons. These neurons, under your direction, can vote on network proposals in proportion to their respective ICP stakes. Thus, the greater your stake, the greater your voice.

You can further amplify the impact of your neuron's vote by increasing its dissolve delay and letting it age by choosing not to dissolve it. In this way, all modifications to the configuration and behavior of the Internet Computer (including the NNS dapp) emerge from people who have skin in the game.

Staking Neurons

The DFINITY Community previously provided a detailed guide about staking ICP to create neurons. Nevertheless, staking options are central to the NNS dapp and deserve another concise overview covering all the essentials. Other NNS dapp options will not make sense unless you understand staking.

When you initially access the NNS dapp, it'll create a main account for you. You can send ICP from Coinbase, Binance, Stoic, Plug, or any other approved platform directly to the address of this main account or create other secondary accounts.

To create a new neuron, simply select the neurons tab, choose stake neuron, and then decide from which account to withdraw ICP and specify how much ICP you want to place inside the neuron.

Note: You won't be able to spawn any new neurons from a staked neuron until its staked amount, multiplied by its maturity percentage, is enough to generate at least 1 ICP. For example, a neuron with a 10 ICP stake cannot spawn until its maturity is at least 10%. With its stake of 22.95 ICP, my neuron will not be able to spawn another neuron until it reaches 4.4% maturity. Therefore, since you can expect to accrue between 20% and 30% maturity per year, it may be wise to stake at least 5 ICP.

Staking Options

Staking options are all about managing your return on investment for your neuron. Usually, you'll want to maximize maturity accrual over the period you intend to stake your ICP in a neuron. Online NNS calculators can help you strategize, but they are incomplete and take time to update in response to new NNS proposals. The daily maturity accrual rate for your neuron is awarded based on:

  • dissolve delay (8 years = 2x accrual rate, 4 years = 1.5x accrual rate, etc.);
  • neuron age (max of 25% bonus to accrual rate after four years);
  • the proportion of daily NNS proposals voted on;
  • average neuron age in the NNS; and
  • the total amount of ICP staked in the NNS.

It's easy to get lost in the details, but here's the bottom line. At the time of writing, if your neuron has a dissolve delay of eight years and you are not yet dissolving it, you can expect an 0.078% daily increase in maturity. If your dissolve delay is four years, on the other hand, then halve that expectation. As the years go on, though, and staked ICP accumulates in the NNS, maturity accrual rate will go down for everyone, but the price of ICP itself will increase, compensating for losses in neuron maturity.

The upside to staking ICP for more extended periods is a greater maturity accrual rate, but the downside is that you'll have to wait longer to access your principal-staked ICP amount. Conversely, the upside to staking ICP for shorter periods is quicker access to your principal staked amount, but the downside is a lesser maturity accrual rate.

Join Community Fund

Are you not satisfied with maturity accrual alone? You can opt to let your neuron participate in the gains (or losses) of Internet Computer development ventures by joining the community fund. I've written about this exciting option here. Note that the DFINITY Foundation is still working out the specifics.

Use this option if...
You enjoy speculative investment, don't mind joining an emerging funding option, and want to participate in growing the Internet Computer ecosystem directly.

Don't use this option if...
You are counting on constant returns or expecting a specific minimum passive income from your neurons. It may take longer for community fund investments to pay off, so joining with neurons with shorter dissolve delays may not be best.

Increase Dissolve Delay

Neurons need a dissolve delay of at least six months to vote on NNS proposals and accrue maturity. Any newly spawned neuron currently has a dissolve delay of 7 days before its ICP stake can be distributed into one of your accounts. Be very careful about increasing your neuron's dissolve delay — it can always be increased up to a maximum of 8 years, but it can NEVER be decreased.

Use this option if...
You want your neuron to be able to vote on NNS proposals and accrue maturity; be sure to set the delay for at least six months, or else your stake will not be productive. Also, the longer the dissolve delay, the greater your voting power, which is calculated as: Voting Power = ICP Stake * Dissolve Delay Bonus * Age Bonus.

Don't use this option if...
You want to access your staked ICP quickly, for example, in a newly spawned neuron. You may also want to access your investment, including any returns, after a specific period. Someone who thinks the price of ICP will experience a significant spike in 2 years may not want most of their funds locked in neurons for eight years.

Start Dissolving

Just because you've set a dissolve delay DOES NOT mean your neuron will start dissolving. On the contrary, even a newly spawned neuron will persist perpetually unless you tell it to begin dissolving. Indeed, the dissolve delay option merely specifies how quickly the dissolving process will transpire. As your neuron dissolves, its voting power and maturity accrual rate will gradually diminish until six months prior to dissolution. At that point, it cannot vote and will not accrue maturity.

Use this option if...
You're ready to initiate the countdown until the happy day when you reap the rich rewards accrued by your neuron over the years. For example, if your neuron's dissolve delay is four years, its staked ICP plus any additional ICP gained from maturity accrual will be available about 1,460 days after you start dissolving.

Don't use this option if...
You still want to take advantage of the maximum maturity accrual rate for your neuron's dissolve delay, and you're not ready to give up your neuron's age bonus. Some people may never want to retrieve their staked ICP, instead preferring to generate passive income from newly spawned neurons.

Increase Neuron Stake

You can send ICP to a neuron as if it were a wallet. The increase neuron stake option simplifies this process by withdrawing directly from whichever account you specify. However, note that the receiving neuron's existing maturity is adjusted to reflect the new staked amount. For example, adding 10 ICP to an existing 10 ICP neuron with 10% maturity would reduce its maturity to 5%.

Use this option if...
You want to beef up your neuron's stake to increase its voting power and future maturity accrual rate. You may also have neurons with smaller ICP amounts that you wish to increase to be able to spawn new neurons more frequently.

Don't use this option if...
You want to keep your ICP liquid to buy things like NFTs, or if you're already satisfied with the ICP amount staked in your neuron.

Split Neuron

The ability to split and combine neurons has always been possible on the backend of the NNS. At present, however, frontend users only have the ability to split neurons. Split neurons have a specified proportion of their parent neuron's staked ICP and retain all pre-existing properties, including dissolve delay and followees.

Use this option if...
You want to do something different with a proportion of your staked ICP. For example, someone with 100 ICP staked in a neuron with an eight-year dissolve delay might want to leave 50 ICP untouched and put the other 50 ICP in a dissolving neuron to access it (and any accrued rewards) after eight years.

Don't use this option if...
You're satisfied with the current amount of ICP staked in your neuron or don't plan to do anything different with a split neuron. It's usually best to stake ICP in a single neuron rather than have multiple neurons with identical properties; rewards from maturity accruals can be accessed more quickly.

Following Options

Be sure to edit your neuron's followees! At a minimum, the DFINITY Community recommends that you follow the Internet Computer Association or DFINITY Foundation on exchange rate topic proposals, which cycle about every 10 minutes. Many people choose to add at least one of these two major neurons as a followee on all topics.

Your neuron will not vote on any NNS proposal unless you either make it vote manually or the majority of its followees vote. If half its followees don't vote on an NNS proposal, or if the votes of its followees are evenly split, your neuron will abstain unless you make it vote manually.

Use this option if...
You want to accrue maturity at a more or less constant rate and trust the agendas of followee neurons. You can add any neuron as a followee for any topic by entering its principal ID. If you don't follow at least one neuron that votes on exchange rate NNS proposals, you will miss out on a significant amount of maturity accrual.

Don't use this option if...
You intend to vote manually on specific topics of NNS proposals. For example, you may feel passionate about governance topic proposals. Suppose the DFINITY Foundation or Internet Computer Association has been added as a followee neuron for governance topic proposals. In that case, your neuron will automatically align its vote with the majority of followee neurons. This may not reflect your own opinion.

Note: It's a best practice to regularly check the voting tab of the NNS dapp regardless of your neuron's followees. The DFINITY Foundation and Internet Computer Association don't vote on every NNS proposal.

Maturity Options

Neuron maturity determines ICP rewards and when your neuron can spawn new neurons. For example, a 20 ICP neuron cannot spawn a new neuron until its maturity is at least 5% (new neurons must have at least 1 ICP). The NNS dapp thus far has two options to manage neuron maturity.

Merge Maturity

Albert Einstein allegedly said, "Compound interest is the eighth wonder of the world. He who understands it earns it; he who doesn’t pays it." Merge maturity is an exciting new option that empowers your neuron to reap the benefits of the eighth wonder of the world. Instead of accumulating maturity to spawn new neurons, you can elect to add some or all of your daily maturity accrual directly to your ICP stake. However, this choice cannot be undone, so be careful.

For example, suppose you have a 30 ICP neuron with a constant daily maturity accrual of 0.05%. Over four years, without adding anything to your stake, you could expect to spawn about 22 ICP in new neurons. Alternatively, by merging all maturity accrual back into your stake, according to a standard compound interest formula, you'd add about 62 ICP to your original 30 ICP stake.

Use this option if...
You want to maximize the returns on a dissolving neuron. It's also generally a best practice to use merged maturity on any neuron from which you are not expecting to spawn new neurons. After all, if you've set a neuron to dissolve or else do not intend to touch its ICP stake until eventual distribution (except maybe to add to it), there's no reason not to take advantage of merged maturity. Math gurus may also want to optimize returns by merging a proportion of maturity accrual while using the rest for other purposes (be sure about what you're doing before heading down this path).

Don't use this option if...
You plan to spawn new neurons or plan never to dissolve your neuron. You can still gain many advantages of compound interest by adding ICP from newly spawned neurons to your original stake after a minimal seven-day dissolve delay. While you will not reap full rewards this way, it has the advantage of flexibility. For example, you can switch to selling rather than accumulating ICP rewards during price spikes or NFT fire sales.

Spawn Neuron

When your neuron accrues enough maturity, you can spawn a new neuron. Again, maturity must be sufficient to spawn a neuron with a stake of at least 1 ICP. Therefore, at the time of writing, a 100 ICP neuron can spawn a new neuron once every 13 days, whereas a 1,000 ICP neuron can spawn a new neuron every other day.

Use this option if...
You have enough maturity to spawn a new neuron. From the perspective of usage cases and compound interest, there are few (if any) compelling reasons to wait to spawn a new neuron. If you're focused on maximizing neuron rewards for the long haul, it's advantageous to dissolve and add new ICP to your stake as quickly as possible. On the other hand, if you're using a neuron for passive income, quickly obtaining liquid ICP is a priority. Only in the case of using the merge maturity option does spawning new neurons not make sense, and if maturity accruals are merged, then the spawn neuron option will not be available anyway.

Don't use this option if...
You can't.

Hotkey Options

Most NNS dapp users will not need any hotkeys. On the other hand, if you have dozens of neurons and need to automate voting or manually control your neurons' individual actions efficiently, you can add hotkeys. You'll probably need some working knowledge of interacting with the NNS via command line to get the most out of this option so that we won't cover it in this user guide.

Voting History

This is less of a management option and more of a record. You can see how your neuron has voted over time and identify any gaps or inconsistencies that might warrant editing your followees. Also, note that votes on exchange rate topic proposals are NOT displayed. The ability to filter voting history by topic has not yet been added to the NNS dapp, and so the sheer quantity of exchange rate proposals would overwhelm voting history.

  • Disclaimer: The views and opinions expressed on this website are solely those of the original author and other contributors. These views and opinions do not necessarily represent those of the Dfinity Community staff and/or any/all contributors to this site.

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