[PROPOSAL] Set Max Inflation at 10%

Hi, your posts are well thought-out but I thought I’d just share a few corrections to the data you present.

Solana’s inflation rate is currently 5.66%, not 7%. The 7% figure you are using is the staking APY, which is higher than the base inflation rate (because inflationary rewards are captured only by the ~70% of SOL that is actually staked). Solana’s inflation rate reduces by 15% yearly, so by this time next year it will be around 4.8%.

Also, Solana’s “unbonding period” is about 2 days 2 hours (it fluctuates betwen 2 days 1.5 hours and 2 days 5 hours depending on the epoch. In the past it was higher, up to 3 days, but technical improvements in the network have brought the epoch length down to a more expected and consistent 2 days 2 hours).

The only complexity with the unbonding period is that it can in situations of very high “de-staking” exceed thresholds which would then only allow 25% of stake to destake per epoch, which would result in the “25% per epoch” figure you stated. However, that has never happened in Solana’s history and would only occur in situations of incredibly extreme stake movements. While you cannot discount the possibility that it could occur, it seems exceedingly unlikely.

Temperature check is important. The rest doesn’t make any sense.

A lot of non-voter validators still left in the 10 to 30 ranking area that can swing this. Get out and vote. I don’t expect big exchange validators to vote (Coinbase, Binance, Kraken, etc), but all the other ones should vote. There is about 20 million ATOM votes there.

This is easily the most important vote in the Cosmos Hub history (even more so than ATOM 2.0). You have to cast your vote, or else you don’t care. Even ABSTAIN (I consciously delegate the decision to my stakers) is better than a non-vote (I am asleep and I don’t give a shit about participation in governance).

Coming down to the wire. 2 million ATOM difference to get to YES. Can the YES camp pull off a Hail Mary?


This shows 2 things:

  1. Take any percentage of the staked ratio, you can’t predict APR/Inflation. Historically, you don’t get the same percentages of APR/Inflation for the same staked ratio percentage. Not even once. Halving won’t fix this.

  2. The speed of the adjustment of the inflation curve is too slow. There is a problem with the formula. Halving won’t fix this.

Conclusion: We should vote no, study the formula, and do tons of simulations to fix this problem as soon as possible.

Isn’t this supposed to be finished by now? Mintscan times are probably UTC. 1 more hour.

Wait. It is finished. It passed.

:partying_face: :tada:

Time for some Eagle Rare. Cheers!

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This is an address to Jae.

Jae, I know you are probably very upset right now as Prop 848 didn’t go your away. Leadership slips from a man when he is not leading his people in the right direction. People can suffer for a goal, but they can’t suffer forever. Once all the tactics are exhausted, people start to question the strategy (the goal) and that is when a leader gets sidelined. This routinely happens in the world and has always happened. A leader can then exit gracefully or ungracefully. My grandfather didn’t give me a lot of advice but the one that he did give me was “Don’t burn your bridges”. For you, this is the type of situation where you want to exit gracefully and you don’t want to burn your bridges.

Economically, one has to always ask himself the question - would I rather be 100% owner of a $1 million business or 1% of $1 billion business. Financially, Option 1 of being Big Man in Your Own Pond is $1 million in the bank account, and Option 2 of being 100th man in Stalin’s army is $10 million in the bank account. Ego can be a pretty expensive characteristic! In your case, you have a very engaged community that wants to take your product to the next level into the mainstream and in front of a broad audience for which simply you may not have the vision and skills to pull it off. You may have the vision but not the skills. In other words, you will make a lot of tactical mistakes that will prevent you from achieving your strategic vision. Everybody wants to conquer the world, there is this tiny problem with winning the next battle. Aaaah, details. In a sense I view you like a Steve Jobs who couldn’t for the life of him figure out why would anybody need a bigger than 3 inch screen for the iPhone. It took a Tim Cook to take the iPhone mainstream with 6 inch screen. Great founders tend to be very quirky (since they are very intelligent) but their very intelligence doesn’t allow them to think like street noob, and as a result they can’t do what’s obvious to the man on the street. Stalin says “quantity has a quality of its own” and quantity over time tends to win out over quality. The 3 inch phone turns into a 6 inch Phone because that is what people want.

I know you want an ATOM token without monetary characteristics but you simply can’t run a decentralized computer network (blockchain) with such a token, as your network’s experience clearly shows over the past 4 years. So your ATOM monetary policy design has to be changed to where your troops (the validators) don’t get decimated by economic reality.

Your creation of and contributions to The Network are highly valued and your continued participation with The Network is very highly valued. A strong conservative voice is absolutely needed to this network to reach 1 billion people because the technology has to be on strong technical footing which is your primary expertise. Nobody wants you to you leave and you shouldn’t leave. Everybody loses battles. Ethan lost his battle last year. You lose it this year. There are a lot more battles to be had, battles that should be had because in the battle is where the TRUTH is discovered. In the battle between the future (progress) and the past (tradition), the present is formed. If you back away from the battle, you back away from the Truth and we are all here searching for it.

Cosmos Hub is in almost 3rd place as a Hub behind Osmosis and Axelar now. Axelar will overtake it next month. ATOM’s monetary policy design was actually being an impediment for your stated goal of ATOM being the top hub of the Cosmos ecosystem. It is “secure” (as in secured by your crew) but if nobody is using it what’s the point of that security? You are a ronin. A samurai without a master. Whether the bonding ratio is 66% or 65% doesn’t really affect the security profile all that much. Many blockchains have absolutely no issues with 50% bonding ratios (see Polkadot). The Hub needs to get back on track get back to the top spot in the Cosmos ecosystem and for that some tactical changes need to be made.

Before you make any rash decisions, I would suggest giving it some time (6 months) to see how the new monetary policy works and at that point once we have some more information we can discuss the monetary policy issue again. There is absolutely no reason for rage quitting here. If you want to be a Stalin, you need to be able to take hits. Big hits. If you want to be a Christ, don’t forget that before his deification Christ got nailed to the cross by the Roman soldiers and none of the Praetorians blinked an eye when doing it. Jesus Christ doesn’t live in this world :wink:

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Anyone know the timeline for this fork? Just saw Jae Kwon’s announcement. Also, congrats to those who had a victory today! Kinda scary the direction this is going now tho.

Well done, the twitter harassment strategies seemed to work by forcing many validators from no to abstain and then to yes/weighted vote. Now, the strategy is shilling hard on twitter about the ‘ATOM halving’ hoping for a quick ATOM pump, good luck with that. It will be funny to see all those twitter bullies fooled by the price pump narrative waiting for the pump, and validators who voted yes waiting for the recovery of their revenues. The markets/traders could had expected earlier this proposal passing, and if there was an expectation of an ATOM price pump they would had traded this much earlier and ATOM price would had increased before the proposal passed. No professional traders expected any price appreciation after this proposal passing, that’s why nobody traded any futures/options or anything betting on the passing of this proposal, even when it was close to passing, which would had increased ATOM price much earlier before the passing of this proposal

Also the hypocrisy claiming that this proposal is to be more ‘in-line’ with other PoS networks, and not about a 2x ATOM price pump. And then on twitter, showing charts of ATOM price, and shilling ATOM price pump because of this proposal. Nobody wants to cut their own revenues, so the only reason of this proposal and the only incentive for all those voting yes is because they expected a price pump that would offset the major drop in yield

Am sure you will find a way to cope. Perhaps asking for more funding for your videos?

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I suggest taking an Econ 101 class (John Locke economics, demand theory of value) then some more advanced economics classes such as Marxism (labor theory of value) and perhaps some Monetarism (Milton Friedman), Modern Monetary Theory (Kelton), General Theory of Interest Rates and Money (Keynes) and Quantity Theory of Disaggregated Credit (Werner) thrown in and perhaps the fog will lift and hopefully you will start to understand the posts in this thread. I have aggregated all of this knowledge and applied it for you with my posts on this thread. I used to get paid a lot of money at big investment banks for this type of work (programming these economic models into enterprise financial apps) and you are given all of that for free. But because it is free it seems to be going over your head.

The fact that you were involved with Cosmos early doesn’t mean you understand economics and more specifically applied economics. ATOM is not money, it’s a commodity and in the worst case scenario depending on how bad Jae wants to be - a security. For both tax reasons and for criminal prosecution reasons. Hopefully that clears it up for you. Please stop insulting people as being day traders. Most of the people on this governance board have been with ATOM since its very beginning, things have gotten so bad that now they need to get involved to rescue this ship. All of these ATOM grants that are feeding you don’t come from the fkn sky, they come from people like me (investors in the ATOM token) so I would ask that you stop with your slandering here because you didn’t get your way on this one issue. You don’t have the qualifications to understand the issue at hand, ok. Relax.

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Well, my impression is professional traders and investors don’t want to even touch ATOM because of the rampant and unpredictable inflation.

Of course this inflation reduction (and other upcoming tokenomics changes) aren’t the be-all-end-all thing that will “make number go up”. But you can have the best value accrual potential in the entire space and investors will still shy away because hyperinflation is a major problem. ATOM NEEDS to get back on people’s radars or else it’s going to fade away and join the ever growing pile of dead coins. I guarantee you any investor worth their salt will carefully analyze investment returns coming from asset value appreciation vs inflation.

The issue surrounding smaller validators struggling is definitely a real problem that needs to be addressed. But that is a decentralization issue, not a tokenomics issue. Reducing inflation is just a first step towards solving tokenomics issues. There will (hopefully) be further proposals to target decentralization and value added issues.

You already have actual data scientists, programmers, and finance professionals laying out why high inflation is a problem. Care to explain why “Yes” votes in your mind are simply because of bullying and pump-enomics? Then why are smaller validators also voting “Yes” and recognizing inflation is an issue? Why are so many yes votes coming from Cosmos exclusive teams, and so many no votes are coming from large validators who validate chains OUTSIDE the cosmos ecosystem?

A handful of accounts memeing on twitter is hardly sufficient evidence. Otherwise, why can’t I argue that lots of people voted no because Jae was threatening to dump millions of ATOM on the market and crater the price? If your counterpoint is, “Oh well, it’s more than just a handful of accounts”, then if that’s true maybe that is truly the majority sentiment and thus cannot be ignored?

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@zaki_iqlusion
Now since the proposal has been passed, may I ask WHEN will the implementation start and HOW will it be executed?

WHEN

  • Will the implementation start once the other proposals on min finlation and inflation rate change got passed? Or will it be updated first?

HOW

  • Will it be updated via a gradual change using the inflation rate change (Therefore would depend on when will the inflation rate change proposal being passed)? Or will it be changed automatically via the NextInflationRate function, which means the inflation rate will be dropped immediately to 10% as the
    current inflation > inflationmax

Its already implemented

So right now the max inflation in the network is 10% already?

yeah, and your staking APR decreased from 20% to 14%

Bonjour, je viens tout juste de m’inscrire sur le forum du fait de l’importance de ce sujet.
Le taux d’inflation max est un paramètre à étudier dans un ensemble de proposition.
Je regrette que cette proposal soit passée sans avoir les 2 autres citées.

L’objectif est de conservé un taux de stacking à 66%, je ne pense pas que cette seule mesure soit suffisante.
Une vision globale et mesurée aurait été appréciée.
J’espère que ca le sera pour la suite.

The proposal itself modifies the setting on the blockchain. It is a specific type of proposal called “parameter change” that automatically changes the setting upon passing.

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What’s wrong with political tensions? Political tensions build the world as we see it. Lack of political tensions is called “totalitarianism”. In any case, if Jae wants to build a different hub that’s fine. That’s the whole point of Cosmos tech after all. However, I need to mention that Jae would not be the only early Cosmos founder/member that has struck on his own. Sunny did that too with Osmosis and now OSMO is a bigger IBC hub than ATOM. Axelar (AXL) is now a bigger IBC hub than Cosmos. If Jae wants to build an irrelevant IBC hub, that’s fine. Let’s see how long his band of validator stick with him and his 20% inflation token whose open market price goes to zero. Good luck!

The only way Jae leaves the Cosmos Hub is by selling his ATOMs. And I am not sure he will want to miss out on the financial upside. But who knows. BTW, do you remember that Elon Musk had to be kicked out Paypal (a company he founded), fired as CEO in order for the board to make the sale to EBay which then gave Musk his first $400 million with which he built Tesla and Space X. Yep. It was other people that had to make Musk LIQUID despite himself. And believe it or not, having money in the bank is important. We are in similar situation here with Jae.

I just have to warn Jae that he is establishing a pretty clear track record of pumping and dumping tokens. Making promises about a project and then abandoning the project by changing the terms later on and acting in non-rational ways. It was first ATOM, then GNOT and now ATOM One. Just like Elon Musk had to learn, you can’t keep going to Wall Street and asking for new money. At some point you have to show the cheese. And if you keep trying to raise money from a different group of fools over time, well, that’s called a Ponzi scheme.

2023-11-28_045808

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One last comment in this thread, this time about the ATOM One proposal. Jae proposed this last year and it got overwhelmingly rejected by the ATOM community. If he wants to go in that direction, fine. That proposal showed you how popular his idea is - not much. I think most of the validators will stay on the Cosmos Hub and may be a small portion - those 20-30 that voted NO on 848 will follow him there. ATOM1 will be dramatically more centralized than ATOM at the start with 20% inflation that will centralize stake even further. But just like after the Bitcoin Cash fork, 6 years later now Bitcoin is $700 billion market cap now and Bitcoin Cash only $4 billion, the same will happen with ATOM and ATOM1. ATOM is in fact moving towards a more conservative, rational and better regulated market based monetary policy that enhances the monetary properties of ATOM while ATOM1 wants to preserve the perpetual venture capital insider dump that Jae originally designed. Jae overtime will find that investors don’t want to be dumped on. In its essence, this is a conflict of interest between venture capitalists (Silicon Valley) who want to extract rent forever from Wall Street (investors deploying accumulated savings). As you can imagine, Wall Street guys didn’t get rich by sleeping on tents on Skid Row and smoking crack. It’s not those guys giving billions of market cap to your project, lads. Those guys can’t even buy a pack of cigarettes much less pay $10 for digital token which is of no immediate use in their miserable lives. lol

In any case, in the fixed-issue PHOTON backed by 20% inflation ATOM1 token, what Jae will find out is that ultimately a financial asset is determined by what it is backed by - the collateral. A Gold depository receipt is just paper. It only has value because there is Gold behind it. The US dollar token only has value because there is a US military behind it. In this case, the value of the PHOTON is ultimately always determined by its collateral - ATOM1. Or more specifically, the market price of ATOM1. And given the 20% inflation, the market price of ATOM1 will be going to zero in the long run. No exchange will want to hold ATOM1 and if they don’t then validators can’t sell their ATOM1 for fiat to fund their operations. The reformatted 100% liquid staked ATOM in the form of PHOTON will not work. At least not at 20% inflation rate. This scheme only works as Cardano has formally academically proven and shown in practice (and PHOTON is essentially Cardano since Cardano is a fixed issuance liquid staking token) only at a 3-5% inflation level. So essentially for Jae’s ATOM1/PHOTON scheme to work, the ATOM1 inflation will have to go down to 3-5% level. Which is what we are doing here with ATOM already. In other words, Jae’s experiment will just prove that the ATOM community made the right choice in Prop 848. No matter what technical approach you take at this economics problem, it is essentially exactly the same economic problem.

Cheers!

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