Burn And 🥩 Harnessing (BASH) Deflation Economic Model

Fantastic comment! Thank-you for using the spreadsheet :people_hugging: I can address them specifically.

The scenario you are creating is:

  1. Green Scenario - POKT price 3x and relays do not increase
  2. Blue Scenario - POKT price 3x and relays relays hit 3B
  3. Pink Scenario - POKT price 3x and relays drop by 60%

First, off, I do not believe those are realistic scenarios with POKT skyrocketing to 3x without meaningful gateway activity. It seems the entire POKT ecosystem believes that meaningful buy pressure will only come from gateway adoption, and these scenarios are the opposite of that.

However, say that POKT does hit a new price trajectory, without the help of gateway traffic, BASH already can follow the path of ARR and increase services rewards on the way to deflation. First lets see how ARR does.

With ARR’s original 38C projection, it will start to hit deflation by 10B relays (similar to the default Goal in BASH).

However if the price were to essentially 3x to the 10C, as you are proposing, then ARR no longer hits deflation at 10B. It instead will have 3.07% inflation. Deflation would instead be hit by 26B relays a day.

This is because with ARR the deflation point always changes according to price. If the price of POKT doubles, it hits deflation with double the relays… and if the price of POKT is cut in half, it takes half as many relays. This exact thing can be done with BASH.

With BASH, if the price of POKT does a 3x increase, and you want to favor servicers with more rewards and not hit deflation by 10B, then you can change the Deflation Goal to 26B to be on par with ARR.

MINT on the other hand is able to make sure servicers always get increase rewards in a cleaner way, but it does it:

:negative_squared_cross_mark: With unrealistic and unstable GFPR
:negative_squared_cross_mark: With uncapped inflation (meaning it does not have a 4.98% cap as PNF has suggesting).

The “Deflation Focused” model of BASH does act similar to MINT where it doesn’t have an inflation cap. However, from what I’ve gathered, folks want to hit PNF’s goal of sub 5%. If the community doesn’t care about capping inflation and just cares to hit deflation by a set number of relays, then the other model does that.

I’m not entertaining the other model at the moment, while the community push seems to be hitting sub 5%.

lol… well that will only help if POKT would 3x. If doesn’t skyrocket, then you are just missing out on rewards :joy:

lol… if we hit 1.15 USD, then we don’t need to worry about deflation at all… just set deflation goal to 6 trillion and ride that reward train :joy:

In Conclusion

BASH is about setting specific goals in terms of an emissions cap, deflation, and maximum buy pressure (burning and staking). If the price of POKT falls, then each goal can still be met WITHOUT over diluting servicers. If the POKT price were to suddenly increase substantially, and we want more rewards to go towards servicers, then the deflation goal simply needs to be moved from 10B.

2 Likes