To @dominicwilliams and everyone else who wants to change tokenomics.
I may have missed some details, but I read most of the discussion. I would like to introduce some principles of tokenomics that I believe in.
- Compound interest is a scary thing. Snowball of existing whales could increase the risk of 51% attacks. Re-staking is a good idea, but selling newly minted coins is not a bad thing. Whether to invest in a new project or just to cover living expenses.
- Newbies should always be welcome. We need to make it attractive for them to purchase ICP on the market and stake it. (Example: They may consider staking to maintain their own virtual servers and feed on their own AI models.) Our tokenomics, anyway, should support this welcoming.
- Tokenomics must be predictable. Everyone can imagine minted Bitcoin in 2100; 21 millions BTC. This is why Bitcoin is respected. Because the community’s resistance to change is so high, everyone can guess the future.
The network must be stable, and also tokenomics must be stable.
I know some have argued for deflation. However, I don’t think deflation is a good thing; because of the first and the second. Ideally, the proportion of newbies’ staking should be a meaningful amount. (Of course, it shouldn’t be too big.) As long as there is no “death spiral”, inflation is not a big problem. The long term inflation rate, around 5 percent, is not too high. People will also burn tokens. If it’s predictable, whatever inflation or deflation, people can adapt and plan their actions.
Even though I agree with some parts of domic:
I don’t believe such problems are critical. Predictability is so important that economic models should not be changed unless there is a major problem.