Background

Persistence chain has been operating for almost 2 years now. It's initial supply was 100M XPRT, which has now increased to 162M XPRT (as of now). In these 2 years of operating, the amount accured to the community pool has only been ~1.2M, of which 530k XPRT was used in proposal #2 and 450k in proposal #13 by the core team itself.

Till most recently, the chain has been operating with the Foundation nodes having ~32% of the supply at 100% commission. This means ~20M of the minted 62M went back to the core team. While this is only through the foundation nodes, it is expected to be over ~35-40M+ as only 30% of initial supply was sold/airdropped to the investors as per the initial tokenomics

While we agree that Persistence is following the ecosystem norms, the above numbers seem questionable.

We need to hold Persistence to higher standards.

##Pain-Points as per severity

1 - As per Persistence tokenomics, 19.4% of initial supply was allocated for Ecosystem Development & Growth. However, proposal #2 and proposal #13 seeked funds from community pool for the same purpose. Community pool isn't meant for this purpose, since funds are already available with the team. Moreover, 2% community tax is unreasonably low.

2 - When it comes to validators, the foundation delegation have just recently been distributed. The intent behind this seems to be related to the approaching inflation halving, which will lead to lesser rewards.

3 - The eligibility for foundation delegation program is fixed at a low 3-5%. For the maximum commission at 2M delegation, the validators will receive mere 35K XPRT per year, which at current price is might just breakeven expenses. This too is subject to halving in the near future.

4 - Persistence utilises a lot from the opensource resources (IBC-go, cosmos-sdk, wasm etc.) of the ecosystem, but rarely contributes to it. Hoping to see Persistence giving back to the ecosystem.

5 - Noteworthy, the validator powers also seems skewed. There could be better decentralisation of voting power.

Proposal

Suggesting solutions and steps that can be taken by the community and the core team, in regard to the above pain-points

1. Increase community pool allocation

Instead of the 2% of the inflation that goes to the community pool, increase it to 10%. With current inflation this should get the pool to ~1M XPRT before the halving and then subsequently ~3M for the next two years due to halving effects

2. Min commission

Set the min-commision to 5% for all validators to promote healthy competition without promoting the commission race game. This can be enforced via code.

3. Remove Block Proposer rewards

While the Block proposers rewards are supposed to be incentive for the validators to climb up in the voting power, the current skewed state of validators makes it way more difficult. It is suggested that proposer rewards be reduced to 0, to eliminate voting power bias. Down the line, use community pools to bootstrap validators to distribute the voting power further

4. Inflation rate change

Change the inflation rate to 1. Ref. CosmosHub proposal #48.

5. Better Community Pool Usage

Suggest allocation of a portion of community pool for public goods like cosmos hub, cosmwasm, cosmology and likewise.

6. Suggestion for persistence chain believers

Since a large portion of inflation and rewards were directed towards the Team controlled wallets for validator incentivization/ ecosystem building. Might be useful to manually fund the community pool with 1M XPRT or drop it amongst long term holders and supporters.

Summary

A lot of the suggestions here are in regard to all the work done in the cosmos ecosystem, so when these changes are included, then the larger ecosystem should be acknowledged as well.

By voting YES to the proposal the users vote their intent to change the chain's parameters as suggested. By voting NO to the proposal the users vote their dissent towards the changes suggested and this can then be taken up to the forum for more discussion. By voting NO WITH VETO to the proposal the users vote that the proposal is a spam and will not be heard. By voting ABSTAIN to the proposal the users vote their indifference to the decision and will be content with either outcome of the proposal.

In the interest of the cosmos community we will continue our pursuit of analysing more chains and sharing similar proposals.