I’m still waiting on answers to my previous questions/requests.
In the mean time here are some thoughts:
(1) Re DAO and Proposer Allocation: I understand there may be good reason to decouple this proposal from any adjustments to allocation percentages. That being said, voters should be aware that if they vote to cut emissions by 60% by passing this proposal there may be need in the near future to revisit distribution of allocations, which could cause servicer rewards to be cut even further if voters decide to raise either DAO or Proposer Allocations (or both).
(2) Re effect of this proposal on price: I reiterate what @cryptocorn and others have said, that there should be zero expectation that cutting emissions will lead to increase or even stabilization of POKT price. @Cryptocorn sites $CAKE recent history as an example of price decline tied to governance action to slash token emissions. I find @Dermot ’s dismissal of this case study as completely missing the mark. CAKE has much closer analogy to POKT (in terms of market cap, in terms of age and stage of maturity of the project, and especially in terms of high-supply-side APR being a driving attractor to the token/project for early investors) than Bitcoin and Ethereum will ever be.
Further @Jinx previously provided a link in his TG channel to a study that show that emission reduction efforts tend toward lower token price, not higher token price… perhaps @jinx could provide the link; I can’t find it at the moment.
I bring this up not as an argument against this proposal, but only that when voting, voters should not have expectation as to what affect on price passing or not passing the proposal will have.
On the other hand, as the POKT token gains meaningful utility via the recently-passed off-chain burn mechanism en route to v1 on-chain burn, passing this proposal does raise the nominal utility value of the token, which represents a price floor that one can reasonably expect to hold , so long as the project remains viable and demand does not drop from current levels. At present, this “utility value” (equating demand side and supply side) is about 0.2 cents per pokt (1.3B relays/day * $0.00000085/relay /600k pokt/day). If the proposal passes, this raises to about 0.5 cents per pokt ((1.3B relays/day * $0.00000085/relay /220k pokt/day). Ultimately, as we bring supply side and demand side into parity, it is desired to have that parity be reached at the lowest absolute values that is reasonable (e.g., ~20 uPOKT burned and minted per relay rather than ~500 uPOKT burned and minted per relay). Toward that ultimate goal, this proposal is a step in the right direction. The question, as @shane put it, is with respect to timing.
(3) Re NR viability and community chains: @shane states, “Ultimately, to me this proposal isn’t so much about inflation, as it is about what the lowest amount the node running ecosystem needs to cover all chains and be performant” Nobody knows where that line in the sand is, and in truth a single line does not exist. We are already non-performant for a number of chains, relying on altruist network and community chains rare-chain support to pick up the slack. This number will grow if this proposal passes. Based on distribution of relay volume per chain, I expect a differential of ~ 6 to 8 chains moving from performant to non-performant as a result of passing this proposal. This number is relatively stable as a function of price (meaning more chains will move to non-performant status as a result of price dropping, but the differential resulting from passing or not passing this proposal will stay fairly constant). Surveying cc results from last quarter, I expect that rare-chain support for most of these additional chains can be added for approximately $200 per month per chain. At current $POKT price points, this price tag for increased rare-chain support is small compared to the reduced emissions.
Bottom line: cc is already being used as a crutch to lean on to get us through v0. This proposal will increase the use of this crutch at a reasonable cost. In an ideal world, there would be no need for altruist and everything would be perfectly decentralized. We are not, however in an ideal world and the pragmatism of crafting the best path to v1 trumps ideals. As cc seems to be working as intended, I do not envision that anything catastrophic will happen with regard to coverage and QoS as a result of this proposal.
(4) Re IP generation: too aggressive cuts in emissions runs the risk of diving out top content creators from the POKT ecosystem who essentially pay for that content creation out of node running pay. Nor can these players expect to turn to the DAO as an alternate source of funding as inflow to the DAO treasury itself is cut by 60% as a result of this proposal. This is an important intangible that voters must factor into their decision; it isn’t just about creating a minimally-viable supply side.