A Burn Proposal
ATOM tokenomics has always had a problem with the high staking inflation, but there is no function to reduce inflation, reclaim, or burn. While Atom 2.0 had considered reducing inflation, the proposed solution was not ideal and difficult to pass through voting. However, with the launch of ICS and the establishment of the “ATOM economic zone’’, a Pareto improvement solution has been proposed that does not harm any existing parties, but can gradually solve the problem in a controllable manner, and should be able to pass through. Overview of the solution: Within the ATOM economic zone, 50% of the income will be used to buy and burn ATOM, while the remaining 50% will be given to ATOM Stakers. The income can come from ICS chain revenue or economic zone MEV revenue. Impact on stakeholders: • To ATOM Stakers : ATOM staking rewards will still be available, and burning has a positive impact on ATOM price, so it is beneficial for ATOM Stakers. 2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio. These…
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I like this idea, it’s gradual, predictable, aligns the value of $ATOM with the economic zone, and does not harm any party’s interests.
It’s an interesting idea.
However, there is still the need to ensure that validators and delegators are incentivized to secure the network.
Without data, this would disproportionately affect smaller validators that need to cover operating costs.
Once the ATOM economic zone grows and we have more data, it may be worth revisiting the ways that revenue can be used to further strengthen the Hub.
I like the proposal.
- Have you spoken to the liquid staking providers on how this new economic model would affect their own?
- Inflation control and MEV markets were swatted down with the atom 2.0 proposal, what makes you sure this is an easier sell with certain other parties, skulking around in the shadows, waiting???
There is no data available, but it can be observed and evaluated as the Atom economy zone develops. This is an approach to gradually achieve deflation without affecting the current situation as much as possible. Alternatively, if 50% is too high, we can start with 10%.
Because this won’t affect the interests of current Stakers, this is the key, making it a feasible approach.It’s just an idea and there has been no communication with the LSD-related team.
it was my impression that unaccountable DAO treasuries and implication of unnecessarily high salaries for council gate keepers were swatted down with the 2.0 proposal. LSDs bringing down inflation over time is an inevitability of their existence, 2.0 sought to speed it up with sudden dilution of stake holders and installing untested LSD providers instead of making them compete for market share. @andy can you elaborate further on the mechanics being proposed here: Andy: 2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio. and how this will work: Andy: These parameters can balance the conflicts and contradictions between the community pool/development fund, ATOM Stakers interests, and ATOM price it seems there is no conflict between CP/development fund and atom staker interests. It is in the interest of the stakers to fund development through the community pool. the conflict is validator nepotism and corruption in fund distribution. this apparent conflict has lead to…
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common_spelling:it was my impression that unaccountable DAO treasuries and implication of unnecessarily high salaries for council gate keepers were swatted down with the 2.0 proposal.
Well then you were not paying attention… What section of the Atom 2.0 proposal even insinuated these assumptions? These ideas are so far out of left field, they seem laughable.
Any group doing work would like to be paid and even now persons managing the treasury are being paid. You would need to justify the claim of unnecessarily high salaries and explain why that isn’t the case right now.
common_spelling:LSDs bringing down inflation over time is an inevitability of their existence, 2.0 sought to speed it up with sudden dilution of stake holders and installing untested LSD providers instead of making them compete for market share.
Not even going to write a response, since none of what you said is even hinted at in the proposal, so it seems this is something you just plain made up.
common_spelling:LSDs bringing down inflation over time
yes,but we can do better,A robust currency system should have both the function of issuing and withdrawing currency.
IMO，ATOM Stakers include validator，Although nominally Atom Shakers and Validators are two different groups of people, they form a collective when it comes to voting and can consider issues together.
If inflation is directly lowered, it may not only be subject to the voting process but also lead to a shortage of funds in the community pool. Therefore, we introduce the function of burning in the new economic zone, which enables the entire token system to operate in a benign manner.
To ATOM 2.0，I vote yes .The greatest significance of 2.0 is to provide the direction rather than the specific implementation method. For example, proposals such as adding a community pool can be implemented and are better ways to implement the direction provided. Directly lowering inflation and allowing Stakers to vote on it is similar to voting in favor of increasing taxes, which obviously has better alternatives.
Hush: Any group doing work would like to be paid and even now persons managing the treasury are being paid. You would need to justify the claim of unnecessarily high salaries and explain why that isn’t the case right now. I base this on the assumption that DAO treasury systems would be stupid large given no current budget proposal to base fund distribution on and the assumption that the larger the treasury the larger the salary required to keep them from stealing it. combined with the fact that a DAO responsible for distribution and in control of all community pool funds is entirely unnecessary with ranked choice voting to distribute funds solves these issues by limiting risk of theft or waste and making predictable the nominal value of funds available to any one council based on community sentiment and desire and reflected on chain. SubDAO Treasury System for the Hub Funding can be made transparent, predictable, accessible, decentralized and eliminate the need to pay treasury managers using existing governance mechanisms to direct the chain by market forces. Starting with an annual governance vote to assign a budget as a % of the community pool or $…
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Andy:ATOM Stakers include validator，Although nominally Atom Shakers and Validators are two different groups of people, they form a collective when it comes to voting and can consider issues together.
Validators do control the vote, forming an oligopoly within the cosmos. your proposal is beneficial to them in that it helps maintain or raise the price of the tokens they dump to pay their bills at no expense to themselves, and i assumed was the reason you said:
Andy:Feasibility of the solution:
1 From a voting perspective: This solution is likely to be passed, as it does not harm the current interests of ATOM Stakers but is logically beneficial for the coin’s price.
what direction did 2.0 provide?
Can you provide practical suggestions for constructive discussion of a proposal that cannot solve all problems, and for evaluating proposals based on their potential to bring improvement rather than simply repeating criticisms that the proposal cannot address fundamental issues?
if i can get more information
common_spelling:@andy can you elaborate further on the mechanics being proposed here:
2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio.
common_spelling:I base this on the assumption that DAO treasury systems would be stupid large given no current budget proposal to base fund distribution on and the assumption that the larger the treasury the larger the salary required to keep them from stealing it. combined with the fact that a DAO responsible for distribution and in control of all community pool funds is entirely unnecessary with ranked choice voting to distribute funds solves these issues by limiting risk of theft or waste and making predictable the nominal value of funds available to any one council based on community sentiment and desire and reflected on chain.
assumption + assumption + assumption = certainty,
sometimes. in some parallel worlds.
Is there a point you are trying to make? One is not apparent within your failed attempt. Other than your own existence, everything is an assumption. I can further support my assumptions, if you would like.
In fact, High inflation is killing ATOM.
The purpose of inflation was making more people to stake,but too high inflation make more people to sell their ATOM,then more less people want to stake. it will become death spiral.
It’s time to change if ATOM want to make great like BTC and ETH, Both of them are low inflation.
Relative to burn 50% income, reduce 30% per year income of Staker reasonable
isnt inflation the rate at which your liquidity is returned to you in exchange for locking up through staking? Liquid staking will result in the same cycles you describe where more LSDs = lower inflation → more unbonding = higher inflation → more staking & repeat, until LSD providers own all the chains/top LSD validators own/control all the chains…assuming they can eventually fix the LPs or make LSDs worth their risk.
People are more afraid of loss , high inflation causes prices to fall. When prices fall, people will choose to sell rather than stake, leading to further price drops
Inflation is not the only way to generate staking reward. You have mechanisms like taxation, MEV harvesting, transaction fees, etc. Inflation is one of the most damaging mechanisms to generate staking rewards, because it extracts value from atom holders and gives said value to atom stakers(similar to a ponzi scheme/pyramid scheme). Inflation generally should be used for the short term and phased out for the long term.
From my point of view, inflation only benefits financial service providers who sell APY to their clients and do not care about a healthy hub.
I think if we ask everyone their opinion on the ATOM tokenomics, every retails and private investors will tell you that inflation is not beneficial for them and that they are all ready to pay much higher tx fees if its to create value for holders and a more desirable token and healthy network. I mean, by what I hear.
I really hope that the cosmos hub will manage to get out of this crazy inflation asap!
common_spelling: It is in the interest of the stakers to fund development through the community pool This can be proven only ex-post, so it can have problems if you pay ex-ante. You can only expect some quality in the work, and assume the contributor incentives only if you have history of that account. EurekaPi: From my point of view, inflation only benefits financial service providers who sell APY to their clients and do not care about a healthy hub. Good point! I guess it also serves other purposes, but the APY one is very big, brings speculation and bad reputation to the ecosystem, especially in the eyes of the developers we are trying to attrack. I believe this proposal makes sense. It is already happening on Ethereum, Binance, Fantom, etc. protocols and is a missing feature of Cosmos. ala.tusz.am: However, there is still the need to ensure that validators and delegators are incentivized to secure the network. I don’t think this proposal reduces the security of the network, or if it does, only temporarily, because the price should adjust upwards given a smaller supply and an equal demand. Also, the tokens being burnt should…
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