Background

When the Persistence core-1 chain went live slightly over 2 years ago, the 'blocks per year' parameter was set based on an estimate block time of 5 seconds. Besides that, a so-called 'inflation halving event' was coded in, in order to reduce the inflation parameters every 2 years.

Now, since the actual average block time is closer to 6 seconds, the inflation halving code is only expected to run around early August 2023, while current inflation has already reached the minimum of 25%.

In close collaboration with the community -including a working group around a review of XPRT token economics- it is suggested to bring forward the 'inflation halving event' so that the inflation rate can continue to reduce, as long as the staking ratio is higher than the target bonding rate.

Suggested changes

This proposal aims to update the minting parameters as follows:

• Inflation Min = 12.5% (from 25%)
• Inflation Max = 25.0% (from 45%*)
• Blocks per year = 5,259,600 (from 6,311,520)

If and when this proposal passes, the persistence core-1 team will also recalibrate the halving module in the next chain upgrade so that the next halving is 2 x 5,259,600 blocks (~2 years) after this proposal passes and the inflation changes are effective.

*Note that the suggested max is not exactly half of the current max. This is to avoid a sudden shock in inflation from the current 25% to 22.5%, but rather have a smooth transition from the current inflation value. Without correction now, this type of shock would otherwise happen every halving event in the future (a design oversight in my opinion).

Additional Context

This proposal forms the first stage of a larger, governance-driven change in XPRT token economics coming out of a dedicated community working group.

More details, and a forum discussion on the overall token economics can be found here

More details, and a forum discussion on THIS proposal can be found here.

Voting

By voting YES, you agree with the proposed inflation parameter changes

By voting NO, you disagree with the proposed inflation parameter changes, and you'll share your arguments on the forum threads linked above

By voting NO WITH VETO, you think this is a SPAM proposal, and the proposal’s creator should lose their deposit.

By voting ABSTAIN, you choose not to participate in this proposal's voting; however, you contribute to the quorum.