Thanks for the update. On the tokenomics side, one point caught my attention: “The Hub has no place for revenue to go.”
Back in January I proposed a mechanism that addresses exactly this, and also the “issue less, replace issuance with revenue” direction: Tokenomic: Revenue-Linked Inflation
In short:
- An
x/revenuemodule as the entry point for revenue. Protocol fees (issuance/redemption, curator fees from the products described above) and voluntary contributions from ecosystem partners go into a revenue pool and are streamed block by block to stakers. Everything is on-chain and queryable. - Governance sets a security budget, not an inflation rate. Each block,
x/mintonly mints the gap between real revenue and the target, within a governance-defined cap. As revenue grows, inflation goes down automatically, down to zero. - Compatible with the feemarket burn. The burn is neutral while the target isn’t reached, and becomes deflationary once it is.
This seems very close to what Phase 2 describes: a security floor, issuance that responds to revenue, and a place for revenue to go. The module spec and parameters are already written in the post, so it could serve as a concrete starting point.
Two things it doesn’t cover yet, which Gauntlet’s findings point to:
- Rewarding long-term staking. Today the model distributes revenue uniformly to stakers. Distribution could be weighted by staking duration to reduce immediate sell pressure.
- Multi-denom revenue. If products generate fees in USDC or other assets while the target is in ATOM, computing the gap needs a price source (oracle).