A Cadence Change to Updates of RTTM Adjustment for Target Emissions (ACCURATE)

[Cryptocorn]

Summary

Moving from a monthly cadence of updating the RTTM to a consistent weekly cadence will lead to less deviation of emission rewards, both over and under, from the target amount.

Motivation/Rationale

Currently the recalibration of the RelaysToTokenMultiplyer (RTTM) to balance emission rewards to the daily target emissions laid out in FREN (690k daily from Jan 1st 2023) and other possible emission reduction proposals (SER at time of writing), has been updated on too slow a cadence such that the daily emissions have significantly deviated from the target.

RTTM was originally proposed to be adjusted monthly, and at points of high volatility within the ecosystem it has been adjusted weekly to better contain spikes and troughs in daily emissions. While moving to a weekly change of RTTM has had some positive effect in keeping emissions consistent with the target daily amount, even this increase in calibration tempo still suffers the problem of being a lagging indicator, and we have seen deviation of 30% or so from our target. This proposal looks to further increase the cadence of recalibration, such that large spikes or troughs in daily relays can be quickly responded to and daily emissions will fluctuate within a much smaller range of the target.

Mechanism

While the author of this proposal believes that a scripted automated updated system that calibrates the RTTM daily or even per block would be both more accurate and require less time from a core team member to spend on updating the emissions, Telegram discussions with Jack(al) have made it clear that this would require development work to enact for v0 of Pocket Network and the team and community has made a clear, conscious decision to not update v0 unless an issue is deemed ‘critical’. As such, any scripted automation of RTTM will need to occur after the launch of v1, currently expected at the end of Q2 2023.

Therefore, RTTM updates will have to be manually enacted. As such, this proposal suggests moving from a cadence of once per month to once per week. Each Monday RTTM is to be updated (unless a public holiday, where RTTM can be updated on the following business day). The 30 day moving average will still be employed as the benchmark for relays.

Dissenting Opinion

“This is too much work to done and distracts core team”.
- In periods of high volatility of emission rewards, both WAGMI and FREN moved from a monthly to weekly cadence of updates, so there is certainly precedent for weekly updates.

“We should let people enjoy the excess rewards”
While it ‘feels’ nice to receive excess rewards over those expected, in reality all we are doing is increasing the inflation rate over the target number and this often leads to token sell pressure.

“What about when relays are lower than forecast?”
RTTM is a trailing indicator and as such relays can go both up and down from the forecast. While the majority of the deviation has been to the upside, we have had shorter periods where emissions are lower than the target. Moving to a weekly cadence decreases the time that rewards can be lower than expected and will lead to less deviation than currently experienced.

Additional

As this will most likely fall under Jack’s purview, I’d like to collect his input and the strength of any opposition to this proposal he may have.

Thanks

Thanks to MSA6867 for reviewing this proposal and offering advice/questions.

[Caesar]

I hope that unbadged community members are also permitted to comment .

As a community member, I fully support rollover to a weekly adjustment and if needed manually, until more efficient, accurate and “on-time” solutions can be executed.

Right or wrong, community sentiment (which stems from “narrative”) towards POKT’s supply and inflation is not the best.

The current system of adjusting emission rewards on a monthly basis contributes to that sentiment, or confusion, depends on how we perceive it.

Changing to weekly is one less contributor leading to an unfavourable sentiment.

In addition to the above, I have been openly curious about “agility” in the current and the future governance structures.

The speedy execution of this could be a confidence-builder that indeed there is capacity to be agile a) if the situation warrants to be so, b) if the change is simple enough, c) the risk is 0 and reward > 0, which is how it appears to me in this change.

Thanks for doing this.

[msa6867]

I am in favor of move to a weekly cadence in setting RTTM. I suggest it be done in combination with moving to using a trailing 7-day average when calculating relays, otherwise periods of strong relay growth will still lead to unacceptably large deviations from the FREN (and any follow-on) emission targets . See the companion proposal I have put in the pre-proposal area for changing the averaging method to a trailing 7-day average.