Removal of the notion that any inflation authorized will be counter-balanced by less inflation in the future, which is obviously untrue.
The amendment of governance procedures first described in plain English in the form of a constitution (much to be implemented in code later) which requires proposals to be well factored, to prevent pork-barrel clauses (and consequently corruption), and the assurance of conservatism in its evolution by not making too many experiments at once. A well functioning hub should naturally not require bleeding edge innovations on the hub itself.
The usage of said constitution to set limits on inflation and treasury, such as by requiring a higher threshold (2/3) to vote in favor of any inflation, and the requirement that those inflated tokens are allocated for a specific purpose and managed by an accountable DAO system; and in the future, by setting limits also on the tax rate.
Also see 6.c:
Combined with the idea to remove the minimum bound inflation rate of 6% (but keeping the 20% upper bound for safety), I think makes for a good compromise. The minimum inflation rate was put in place for two reasons: one, to force the concept of an inflationary token as separate from deflationary/maximalist tokens (this clearly hasn’t succeeded as well as I had hoped, but maybe this ATOM ONE & ATOM2.0 conversation is accelerating it). Two, to ensure that validators can be bootstrapped by capital, to ensure that some level of transfer of ownership happens toward the validator operators.
It isn’t strictly necessary (and in retrospect I think I would rather consider a flattening factor for validator rewards to allow large validators to subsidize smaller ones for decentralization.) Furthermore, with a full ICS implementation and thus more transaction volume, there will be more incentives just from transaction fees for ATOM holders to stake beyond the ATOM inflation mechanism. So we may even see, naturally, the inflation rate to go down close to zero, or even negative(!!) to peg the bonded token ratio at 2/3. In short, removing the minimum inflation bound allows inflation to naturally decrease toward zero (or below) as the network grows and the functionality of the hub matures.
These are just points already made above. Here is another one:
- Preserve the principle of “skin-in-the-game”.
The modification of the governance system to allow those who vote YES to collectively pay for any donations toward any treasury DAO. If the argument is that there will be significant return on investment by incurring a self-imposed inflation tax, then voters should feel comfortable donating their own funds toward that purpose and reaping any investment rewards. Preserve the principle of “skin in the game”; just as validator slashing only slashes those delegations toward that validator, allow ATOM holders to contribute their funds by their own investment thesis.