Let me take under advisement. I think as long as we get to single digit inflation by the end of the 18 months… will post on wednesday; busy w tax stuff today
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My reckoning was (16.8*0.98)^18 gave around 8% by Summer 2024 - so used 2%.
Can those with more math skills than me show if I’m wrong or suggest the other solutions? Off the bat 4.3% monthly seems high, but if that’s the number taking us to ~8% in Summer 2024, will support.
Question: How do we integrate this with v1 and region/chain fluctuations to incentivise under represented areas? I assume all that can be done within the overarching headline emissions figure?
Target 420K daily emissions kek.
-690k per day is roughly 20700000 per month
-50% target is 10350000 per month
-4.2% reduction MOM OR 95.8% of the monthly numbers takes us to 50% (10350000 per month) in roughly 15/16 months
Yes, this is what I meant
Our good friend Vitaly on twitter. Will wait for others to chime in.
I don’t get this number
not quite… that would put us around 11 to 12%. On the otherhand, I feal 4.2% may be too aggressive. Let me play with it some tonight
Another reason why I don’t want to be overly aggressive… The more aggressive, the more constrained the sandbox when trying to develop a demand-centric approach down the road
… but weed heads do.
Actually, targeting 420 in 18 months is almost exactly spot on… will work through the numbers in a bit
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jeez, ok will wait to see the magic
walking this back a bit… it would be 12% if measuring inflation over PREVIOUS 12 months… but around 9.5% if anticipating inflation over the UPCOMING 12 months assuming no further reductions, and would be around 8.8% over UPCOMING 12 months assuming continued 2% monthly reductions., right in line with @Cryptocorn’s original statement
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Would be curious to see the model, this doesn’t match with your Table 1. In fact your Table 1 and my back of the napkin math match.
Regardless, I will very happy with 8.8 in 12 months @2 % reductions; makes our job & negotiations easier.
Also, can you plz take the base supply number (wherever needed) from poktscan or anywhere more real time? CG and CMC seem all over the place.
On January 1, we were at approx 1.51B total supply. As of Febrary 1, we will be at approx 1.54B. That includes every last token ever minted. CG and CMC may both apply various exclusions to report lower numbers. You ought not see a higher number reported anywhere.
I t comes down to a question of the best way to report inflation. I tend to favor a forward looking 12-month forecast rather than a historical report of the preceding twelve months. For example, as of January 1, our 2023 inflation forecast (assuming no further reduction effort) is 16.8% whereas the inflation over the retroactive twelve months was 100% . The first method, I believe, is of more importance in evaluating the current state of POKT. Even with no further emission reduction effort, forward looking inflation will be 13.4% in 18 months simply because it will be estimated at that time against a base supply of 1.8B instead of the current 1.54B. I’ll post a spreadsheet shortly where you can see forward and backward looking inflation estimates under different emission reduction efforts.
The spreasheet used to generate the graphs and discussion is located here:
Hi @msa6867 ,
Thanks for sharing.
Your forward looking inflation calculation is pretty interesting and unique, and it took me a while to understand your sheet.
But I suggest that we stick with the conventional way of calculating annual inflation, which is:
((Supply M12-Supply M0)/Supply M0)*100
In fact the 16.8% figure has emerged from the same above formula:-
-Current Supply (M0): 1500000000
-Daily Emission: 690000
-Supply in 12 Months: 1751850000
-Annual Inflation: 16.8%
And therefore we should stay consistent to show any changes in annual inflation; in this case reduction.
On this basis and the base figures of current supply and current emissions, I did some calculations assuming 2% reduction in monthly emissions for 24 months:-
-12th Month Projected Supply (M12) is 1721394630
-New Annual Inflation 14.76% over M0 (VS 16.8% projected without any reduction)
-18th Month Projected Supply (M18) is 1813519015
-Annual Inflation is 12.13% over M6
-24 Month Projected Supply (M24) is 1882203009
-Annual Inflation is 9.34% over M12
I am still very bearish on the 2% reduction as it gets us to single digit annual inflation in 24 months.
We could keep the above figures aside for a moment; we should first agree on the formula and the way we see annual inflation and reduction. I suggest the conventional way, the basis behind 16.8%
The other important question is- what should be the basis of termination? Should it be- we stop after x months? We stop after we hit y%? We stop after we cut emissions by z? We stop because by then Ramiro &/or PNI’s model will be ready to be deployed. I am also sensitive to the V1 timeline argument; Arthur said test net will be ready in Q3.
For consensus amongst the larger audience, we should tackle such questions and potential roadblocks upfront.
@RawthiL @Cryptocorn , please share your thoughts as well.
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Correct. This is the best method, in my opinion. This corresponds to my column G. The problem with backward looking rather than forward looking (column H) has been stated above, while column F fails to incorporate anticipated reductions.
My projected supplies at M12, M18 and M24 are slightly off from yours for some reason, but the same ball park and same genearal conclusion.
that is why I jumped on @Cryptocorn “420” merry number… it gives a good compromise between 2 % and 4.2% and gets us to single digit inflation by the end of this year… will post a summary shortly
Agreed. that has always been the plan. The only nuance is that I favor reporting inflation over calendar years. - makes it easier on the brain… but still using your formumla
The basis of termination will be 18 months or until superseded by a different proposal. The reason for 18 months is to get us to v1 and a few months beyond at which time per-chain- per-region RTTM control will be in the works and we can pursue Vitaly’s demand-centric ideas. Plus 18 months gets us to a time frame just about when app burn may be expected to turn on, so emissions will need to be reevaluated for that as well.
I think you misunderstand what @profish was doing and what he and @RawthiL et al may continue to do if funding is provided. It is the creating of a simulation model of Pocket, as is now, and as is anticipated to be in v1 (with fisherman in lieu of cherry picker, etc) via a simulation environment that may make it easier to evaluate new ideas and “what-ifs” on changes to emissions (such as Vitaly’s, etc.) or other potential protocol changes. It is not the new ideas per se.
That will be the time frame we can start work on Vitaly’s approach. I believe that will be at least a 6-month effort. II a new approach is finalized prior to the end of 18 moths, no problem with switching over to new approach as soon as it is ready. No need to actually wait until the 18 month mark. The 18 month is there as a forcing function for the DAO to take new action on emission once V1 is up and stable (that plus satisfy @RawthiL desire to not be able to lay claim to a (“Max Supply”)
I don’t see any roadblock. I will post the revised reduction schedule in a little bit. I think it will satisfy you and @Jinx desirements to get quickly to single-digit inflation while not being as aggressive as the 4.2%… stay tuned
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Targeting 420k at month 18 is equivalent to 2.72% monthly reduction. Which will hit single digit inflation late this year. Projected inflation for next calendar year is 9.5% and 8.1% the year thereafter.
See comparison to 2% monthly reduction here.
This is what I propose to go forward with. There is no single best solution. This is about doing something reasonable and “good enough” as opposed to doing nothing.
[Note: the reason forecasted inflation only goes from 9.5% to 8.1 % between upcoming year and following year is due to stopping the reductions after 18 months. If 2.72% monthly reductions were to be renewed for an additional 18 months after the 1st 18 months expire, the 2024 and 2025 inflation would be 9.3% and 6.1%, respectively rather than 9.5% and 8.1%.]
Thank you @Caesar and @msa6867 for the better maths than I could supply.
Would we agree that our new target is 420k daily emissions from the current 690k. I.e, it continues to cut inflation and move the needle, but doesn’t get into ‘dangerous territory where unsuspecting things can happen’.
As always, we have a variety of opinions on what to do about inflation, but it seems the ‘general’ consensus is to cut (Mike, Art) inflation a little more aggressively.
What about cutting emission from 690k —> 420k over 12 months?
This would be a reduction of 22,500 each month from the daily emissions target.
This would get us to roughly where we think the right ball park number is (420k) a little more aggressive than previously suggested (18months → 12months) , gets us to ‘do something’, and can always be updated.
Given that we are looing at testnet in q3 and the today’s latest estimate was that there is a 50% change of mainnet launching by EoY, the above figures would seem to coalesce to a v1 launch where the next steps can be taken.
I’ve updated the last spreadsheet to show comparison of 2.72% (420 in 18 mo) to 4.05% (420 in 12 mo). The latter gets is to single digit inflation by August this year vs December this year for the 2.72%.
You know I favor the less aggressive approach but can compromise if that is where consensus lands… Let 's hear from the others
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“I do believe we need to be more aggressive with reducing inflation, more so than SER (will respond accordingly there as well).” Mike in the amended PEP 49
While these curve balls surprise me (if PNI wants to respond, they should respond NOW- what’s stopping them?) and this somewhat contradicts Arthur’s last message to let SER take its course, it’s another respected voice in support of aggressive cuts.
I can’t believe we are playing memes (from 69 to 420) but I am open to anything that is “pragmatic-good” for Pocket 
With V1 main net a year away, any related concern is put to bed for sometime.
I wouldn’t take it for granted that there won’t be any resistance to cuts. In fact I have read such comments in other community spaces.
For argument sake, I will try to put together a simple table of supply and inflation (emissions) for top 20-30 tokens by MC. Without even having the table ready, I am almost confident that 100% of those tokens have supply and inflation in ‘strict control’ and are at single digit running inflation. I hope that will somewhat help in countering any dissent against aggression.
There is no magic number or method, but benchmarking against what exists is an age-old standard practice.
Great! Your sheet is not for the faint-hearted. Given that we agree on the basic formula, could you please answer the following questions-
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If 690k were cut by 2.72% and 4.05% (separately) from Jan 23, what will the annual inflations in those two scenarios be for the calendar year 2023, against 16.8% in “do nothing”?
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If 2.72% and 4.05% (separately) cuts in daily/month emissions are continued in 2024, what will the annual inflations in those two scenarios be for the calendar year 2024?
Sorry, have to live by my reputation set by our friend Vitaly of the guy who breaks complex things down to simplicity
My wish list/recommendations-
a) Single digit annual inflation (as per the standard formula) for calendar year 2023- arrive at the cuts in emissions per day/per month needed to get there (unless the cuts look outrageously high).
b) Slow it down to less than 5% (target TBD) annual inflation for calendar year 2024, maintain that until and unless superseded by a superior and dynamic model at any point in time.
c) Start the cuts from March, 23 and therefore make this proposal time sensitive.
Thoughts are welcome specially from @RawthiL as it appears that myself, @Cryptocorn and @msa6867 are somewhat in agreement.
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will be interesting to see the table. I’m betting mid-teens will be more of a sweet spot…
I have no tie to meme… but it does seem to be prevalent in the space. Am just as happy to abandon the idea… eg a straight 4% monthly reduction rather than 4.05% etc
Agreed. That is why I started this approach in the first place. We want continued reductions that we have ability to get buy-in among node-runners.
Sorry if I don’t answer your exact questions. I see no reason to report numbers assuming reducitons starting Jan 23, since that ship has sailed. Please permit me to assume 690 for Jan and Feb and first reduction to lower number in March.
2023 inflation will come to 14.8% and 14.0%, respectively for monthly reductions of 2.72% vs 4.05%
Assuming the above reductions that start March 23 continued throughout 2024, the 2024 inflation would be 7.5% and 9.3% respectively.
For calendar year 2023? For which we are already 2 months in (by the time anything passes and is implemented? That would be very hard to achieve using a monthly reduction approach. You would need an all-at-once approach like Art’s. Monthly reduction approaches are cumulative in nature, so the first months have the least effect in changing the “number” but it snowballs from there.
Bottom line - we can go back and forth and back and forth on best approach forever. Let me just get the monthly reduction approach to proposal and if the community rejects in favor of a drastic single cut, then so be it.
As a reasonable accommodation of everyone’s input thus far, I plan to go forward with a simple plan of 4% monthly reduction for 12 months starting March 2023.
The pendulum will swing hard, actors might find each other unreasonable primarily because of the diversities, but equilibrium (consensus) will be ultimately attained between “rational actors”.
Here is our progress so far-
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A simple reduction plan without mentioning max supply
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Aggressive reduction than proposed initially: 1.4->2->2.72 & now 4/4.05% on the table
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Open to be superseded by superior and more dynamic models in the future
So we have indeed made progress.
The forum me is all about negotiation, deflection of conflict, management & resolution.
There are different ways of looking at data that need not be right or wrong. It’s important for me to know what an X% reduction does VS the base 16.8% (for the same period) that has been thoroughly evangelised. I want to be able to set the narrative in a simple way that the community will appreciate- “Look we were at 16.8%, and now we have slashed it to Y%.”
Anyway, I had created my own table, I wanted to compare numbers for hygiene sake, and I agree to go ahead with 4/4.05% reduction starting March, 23.
I will try to complete this during the proposal phase just to counter potential rebuttals.
We have a green light at least from my side to proceed to the next stage.
Thank you.
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