I would like to propose a new type of tokenomics based on 3 principles:
A min/max absolute Inflation/Deflation range of -2.5/+2.5%
A 2 tracked tiered staking system of:
Time Based Staking
Amount Based Staking (= just holding an x-amount of ICP in a wallet)
The reasoning for 1: A min/max absolute Inflation/Deflation range of -2.5+/+2.5%.
$ICP becoming a store of value and it’s price will go up or remain stable
Stakers will remain relatively just as wealthy when you get 20% staking rewards on a 20% inflating token supply, as when the holder gets 2.5% staking rewards on a 2.5% inflating token supply.
The reasoning for 2: a 2 tracked and tiered system of staking.
There are a lot of corporate, institutional and governmental professionals who want to participate in blockchain projects, but cannot do time lockups due to law and/or accountancy problems/prohibitions. These investors can only enter non-timelocked products (as such look at the size/marketcap of BTC). This is also one of the reasons Polkadot just reduced their bonding-lock-time from 1 month to 2 days, so these professional investors can enter by just simply holding an amount of DOT in their wallets.
Being willing to invest certain big amounts of money in a token is just as much a sign of faith and support as locking smaller amounts of money for longer periods of time.
So both these investment styles of time based tiers and amount based tiers should be offered to potential ICP investors. So we can get investment and support from a wider range of holders and supporters.
The time based track will give rewards based on time locked neuron staking as we know it right now. With a maximum/minimum reward respecting the +/-2.5%% new inflation/deflation range.
The amount based track will give rewards based on simply how much ICP will be (stake)held in a wallet. With the same maximum/minimum reward respecting the +/-2.5% new inflation/deflation range.
The time based tiers will be open for debate but along fixed options of: 3-6-12-24-36-48 months locked neuron staking.
The amount based tiers will be open for debate but along lines of: 25K$-100K$-500K$-1M$-10M$-50M$-100M$-250M$.
The lowest and highest tiers of time-based staking and amount based staking will give the same % awards. As such this system will also be most honest, since a person locking just a $100 for the longest time based period of 48 months will receive the same staking % as the corporate or institutional amount-staking $250M in it’s wallet.
Finally the 2.5% inflation/deflation tokenomics will be calculated on an average of a set of parameters based on usage through time. Like burn rate, network usage, time-staked and amount-staked numbers and so on smoothed / averaged out over some daily/weekly/monthly time-average parameter/changecalculations.
ANY tokenomics changes should come with the possibility to current staked people to unstake instantly. Anything else is just a disguised scam to take value from them, otherwise why not letting them unstake ? Prove me wrong.
Hi, I am deeply inside the 8 years club for a long long time. I also would think it fair that if the tokenomics are going to be overhauled, all the longterm holders should be given the possibility to renew their choices. So that means all active staking neurons should be given the option to partly or fully become unstaked for at least a certain amount of time, so the holder gets a new choice of what to do with his/her ICP in this new environment.
I however do not see your point of disagreement, since everyone stays relatively just as rich after this change as before. I myself for example am staking 8 years fully locked, and simply would continue to do so under these new tokenomics.
I’m a strong supporter of non-inflationary tokenomics. I do agree that it doesn’t matter if you earn 20% ROI if the value of the asset goes down 20-30% over the same time period. That said, I haven’t observed this exact behavior in the crypto market. The prices do seem to move in arbitrary direction at arbitrary times.
HOWEVER, before such a change to non-inflationary economics can be made, a very important question needs to be answered – and it doesn’t seem to be answered in the proposal.
Today, some entities (such as the DFINITY Foundation) earn their ICPs from the inflation. Which means that the entire community is financing the foundation. Voting rewards and NP rewards are all paid out from the inflation.
So in order to have a non-inflationary tokenomics, you need to come up with a (realistic) source of ICPs for 1) voting rewards, and 2) NP rewards.
And no, cycles burned are not enough ATM. They may be one day, but they are not enough today.
I am as honest as I can, presenting this as far as I think I understand. As far as my intellectual capacity goes, my proposal looks really honest according to my understanding. I am simply a retail holder, bought most of my cryptos at the tops of 2017 and and 2021, saw my investments melt down by 90% for about 2 times, and melt by 50-75% another 3 times. But I am still here because I love the space, the tech, the promises of another future. I am no way a whale, or even a rich early insider who bought cheap pre launch. All the tokens of any crypto I have I paid for from my own salary money from the job I work. So don’t think this through too much as to what my deeper / secret agenda might be, because I am too simple to have one.
People more clever then me will have to continue these lines of thought I proposed, or not if they deem so better. These are just my understanding of being in the space over the last couple of years. Thanks for your elaborate response. I have no idea who sponsers who. But if money goes to the DFINITY Foundation, that seems to be fine with me, since I want them to be well funded and strong for a long time.
The [inflation] money does not go only to the DFINITY Foundation. It goes to all voters (DFINITY is one of the voters) and all NPs (DFINITY is one of the NPs). But if we don’t provide an alternative way to reward voters and NPs, then we can’t change much.
Again, I’d love if the inflation was close to 0. Or if we even switched to deflation. But the token economics needs to be sustainable long term. I’m still hoping that someone will come up with a viable proposal on how to eat the cake and have it too.
