PUP-11: WAGMI Inflation

[adam]

Chiming in on a few different points:

@Rodeo_Crypto

It appears that the principle reason to maintain the Multiplier and thus high inflation is to incentivize current and future noderunners. This is inadequate for the following reasons (i) the initial Multiplier had a much lower APR (prior to the current relay growth starting in November) yet node growth rapidly occurred, (ii) established businesses like $POKT do not require exorbitant inflation/APR to incentivize nodes and (iii) speculative node-runners acquiring $POKT nodes to receive 200% APR are not desired participants in the network

Totally agree with this sentiment. Well made points. @Rodeo_Crypto.

@zaatar

How does the POKT$ token price figure in this debate? If the price drops due to high inflation, won’t that make use of the network more attractive to developers, enlarge the network’s market share, increase demand and drive the price back up?

@simsst

Make the cost to dApps in a stable currency (USD) - use the proceeds to buy and burn POKT

@simsst @zaatar, developer price is $USD pegged. See: PUP-7: Whole Lotta Requests - #6 by JackALaing

@shane

My hangup is having an economic model that is controlled by a few (the Foundation Directors). I do not feel this is a common mechanic for decentralized projects, and I would be concerned about the optics if this is our long-term solution.

The idea, as @o_rourke describes, was to set a target with the DAO via a proposal then have the Foundation Directors adjust the RelaysToTokensMultiplier to hit that target. Unfortunately, with volatility in relays, there will be a regular adjustment of RelaysToTokensMultiplierto hit the WAGMI target as determined by the spreadsheet linked above.

@simsst

Further offsetting deflationary mechanism: take and burn a transaction tax of 1%; same for a bridge tax of 1%.

I’m not opposed to other burning mechanisms. I’d like to encourage the distribution of the token, but there may be a right time/place for this sort of mechanism. I’ll add some language to clarify.

@Rodeo_Crypto

The economic model you describe is not in place. It was a theoretical model that $POKT could adopt.

100% correct. It was a model with arbitrary inputs that led to a decrease in inflation.