Blockworks Research Tokenomics Summary

As part of the tokenomics grant sponsored by AADAO, Blockworks Research focused on:

  1. Reviewing ATOM’s dynamic inflation model
  2. Aligning ATOM with the inevitable growth of liquid staking
  3. Developing a mechanism to help with validator stake centralization, especially as it relates to the economics behind Replicated Security

You can review our work in these 3 posts here:

  1. Monetary Policy (ATOM’s Supply Schedule)
  2. Introduction of a Dynamic Liquid Staking Tax
  3. Introduction of a Vote Power Tax and Creating a Dynamic CP Tax

In these posts we gave our recommendations for what the parameters of ATOM’s tokenomics should be. While there has been great conversation around these ideas, we believe it is important for the community to have the tools to model out how these changes could impact all Hub stakeholders (and potentially even make their own recommendations if they like our concepts but may disagree with our suggested parameters)!

Below is a link to a Google Sheets-based model that allows anyone in the community to change any parameter for ATOM’s tokenomics and compare the current conditions and recommended changes. We will keep this document in “View-Only” mode, so if you’d like to play around with it, please make a copy on your local Google Drive.

Don’t hesitate to reach out if you have questions or don’t understand how something works. Thanks again for reading and we look forward to the next phase where we bring some of the ideas to a signalling proposal in the coming weeks/months!


Thanks a lot for this. We’ll have a deep dive into this and give a comprehensive review.


Thanks for working out all these concepts and sharing this comprehensive sheet with us.

I have a question regarding the inflation schedule proposed in this work. Should this inflation model be implemented, we would hit ~10% inflation by May-July next year, a similar level as proposed by @zaki_iqlusion (set max inflation to 10%).

I wonder whether it is necessary to approve the 10% max inflation cap now, given that we would hit that level anyways within a couple of months. Plus this path seems to be more steady and smoother. What are your thoughts?


  • How would this proposed inflation model change if we were to implement a max 10% inflation cap?
  • Is the inflation model outlined in this sheet set in stone, or is it somehow unpredictable, meaning that it will change with a higher or lower bonding ratio similar to the current inflation model?

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entirely agreed with that. Make sure you post this into the reference topic : [PROPOSAL] Set Max Inflation at 10%

We could slow the inflation reduction so its not as drastic if we implemented the 10% cap soon. The problem is that currently the bond ratio is right at 2/3, so we very well could start re-inflating if only a few more delegates unbond, so Im in favor (regardless of our proposed model) of reducing the max inflation.

The “recommended” inflation model is set in stone based on the params outlined in the Summary tab and does not change based on the bonding ratio. The only thing that changes is the staker yield and the liquid staker yield based on adoption of liquid staking and the overall bonding ratio.


Let’s reduce min inflation to 0 instead of capping max inflation. I like ether’s monetary policy. We can go negative for min inflation once we start getting ICS revenue


Since the income of ICS is unstable, it can be ignored.

The annualized rate of 1.5% adopted in the proposal is based on healthy national currency inflation conditions, which ensures an annualized interest rate of at least 2%.

Finally, I am satisfied with the content of this proposal and can accept it.

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