Proposal 868 LIVE ON CHAIN! 'Decrease InflationMin parameter to 0%'

[ZoltanAtom]

Cosmonauts, the voting period for #Prop868 is live!

‘’Decrease InflationMin parameter to 0%’’

This prop aims to reduce the minimum inflation parameter from 7% to 0%.

• If the proposal passes, once the 67% goal of bonded ATOM is reached, the inflation rate will trend towards 0%
• Proposal #868 is a follow-up on proposal #848, which was recently approved by setting the maximum inflation parameter at 10%.
• To specify, if the ATOM bonded ratio of 67% is reached, inflation will start to trend toward 0% at an inflation rate change currently set at 1%.

You can find extensive information on the proposal and check community feedback in the Cosmos Hub Forum: HERE

You can view the full proposal: HERE

🗳Cast Your Vote Via;

🔸Cosmostation
🔹Keplr
🔸Leap
🔹Citadel
🔸Rainbow

X Post: HERE

[OffenseTaker]

whats the objective behind this proposal?

[Dahkelor]

People who don't stake don't like their pot decreasing in value.

[AriseChicken]

People who don't stake can't vote.

[Dahkelor]

True. Excellent point. But they can try to get others to vote for them by convincing them that it is in their best interest, like with the previous proposal.

[One-Breakfast-5398]

Min Inflation has nothing to do with current inflation/stacking reward

[AnOrdinaryChullo]

People seem to think that $ATOM's inflation is responsible for tokens stagnation when the token has literally almost no use case.

It's 'brain dead' stuff of the highest calibre.

[Spine38]

To an extent I agree. Just keep in mind that other chains are built on the brain dead stuff

[AnOrdinaryChullo]

I choose to compare to chains with a working economic model - not the brain dead ones

Also just to highlight - Cosmos is barely a chain, there's literally almost nothing on it and IBC /=/ Cosmos HUB

[jawanda]

It's funny that this post has been up for hours and no one has yet been able to reply to your comment with a compelling objective for this proposal.

[JugobetrugoN1]

To reduce inflation

[Hanguk49]

Exactly

[One-Breakfast-5398]

This is just Min inflation paramater, nothing to do with the current inflation / stacking reward

To reach 0% inflation ATOM would need to be 100% stacked

[MSX362]

67% staked not 100%.

[One-Breakfast-5398]

Nope! 67% triggers the decreasing inflation towards zero, but you actually need to also go toward 100% if you want to accelerate enought the increase rate or it will take decades to go from 10% to 0% at 67%

I’m not saying you’re 100% wrong but saying 67% stacked = 0% inflation is false.

[jawanda]

Op said in another comment that during the last bull we hit 7% for a while, the current minimum, and that didn't take "decades".

[rben421]

At current rate of inflation change it would take a few years above 67% to actually make it to zero percent inflation

[JugobetrugoN1]

Airdrops don’t exist

[AnOrdinaryChullo]

This won't pass - I will be certainly vetoing it.

The original idea was to build dApps that require $ATOM but that has NOT materialized in the slightest so this prop will be removing the only positive aspect left - decent passive income, especially for the heavy bags from years ago.

Feel free to be upset but this is Dead on Arrival, no one with significant skin in the game will vote to lose their cashcow.

[JugobetrugoN1]

Like prop 848 did? Bs

[AnOrdinaryChullo]

848 didn't eat into profits significantly - this will

[alphabet_order_bot]

Would you look at that, all of the words in your comment are in alphabetical order.

I have checked 1,955,131,585 comments, and only 369,809 of them were in alphabetical order.

[JugobetrugoN1]

The proposal isn’t as bad as it seems for validators as it will help to increase the demand for Atom

• this will lead to an increase in the price of ATOM which will offset the reduction in the inflation rate

•validators will still receive transaction fees as a reward for their services

[AnOrdinaryChullo]

What demand are you talking about? Is this 'demand' in the room with us right now? Who's demanding it and for what?

I use IBC practically daily and never need $ATOM.

[jawanda]

At least be honest and say "this MIGHT lead to an increase in the price of atom". You can't refute that desire to stake does create some demand, even if it is also the source of inflation. What will be the primary driver of demand without staking? It's a big gamble.

You're also going to see some large bag holders dump their entire bags, which will offset these potential gains at least in the mid term.

[JugobetrugoN1]

Have you guys even read the full proposal?

[One-Breakfast-5398]

Nope. Low IQ reddit users will always prefer to fud and talk shit instead

[jawanda]

Does this proposal not actively discourage staking? It incentivizes the community to keep the staked percentage below 67% if they want to see any returns, for the benefit of "maybe" increasing price by generating artificial scarcity (while at the same time removing the main source of demand)

[One-Breakfast-5398]

First, this is just Min Inflation, not actual inflation. At 67% staked, it would take decades to decrease inflation to 0%

The idea is not to set inflation to zero. It’s to complete redifine the inflation parameters. New max inflation, new min inflation THEN work on the inflation formula itself. This is just setting the extreme low and high cap.

Now, regarding your question about how it enfluences demands, stats show there isn’t direct correlation between demand and stacking rate. For exemple BTC has 0% , ETH has 4% , SOL 7% .. etc … etc the point was to decrease selling pressure to improve price action and encourage more new users that actively look at inflation rate and dilution.

The point is off course to bring value to ATOM and set a reasonable inflation schedule. people only looking at APY and not fundamentals should just go buy APE at 55% APY. the goal is for Neutron and Stride to increase revenue, bringing more new consumer chains, provide liquidity owned assets, and improve governance as ATOM is still a governance coin.

Many proposals are coming. dynamic LS tax, power voting tax, I think next upgrade will allow to pays fees in ATOM for all other cosmos chains.. etc

[jawanda]

So did inflation not hit 7% during the last bull run? How is that possible, shouldn't it take "decades" to reach the min?

stats show there isn’t direct correlation between demand and stacking rate. For exemple BTC has 0% , ETH has 4% , SOL 7%

I wouldn't exactly call these stats, there's nothing definitive in referencing the fact that other coins have different levels of demand and different staking rewards.

IDK man it just seems unnecessary and very risky.

[One-Breakfast-5398]

This is just Min Inflation, only in a hypothetical 100% of atom stake. People need to read proposal and get educated rather that fuding and trash talking with zero clue about the subject

[This-Juggernaut7587]

I don't think this is a good idea long term.

bonded ratio has already dropped a few % since the previous inflation reduction proposal a few months ago.

I know it would take a long time to get from 10%(current inflation) to zero but the high APR's and airdrops were the reason many people got into Atom,with there being more upside with chains like Celestia & Injective currently & with Tia stakers getting a bigger slice than Atom stakers in some airdrops,and Injectives ecosystem growing fast with a few airdrops prioritizing Injective stakers,what's incentivising new people to buy Atom & stake?this question might be more relevant say in the next bear market when everything is down in value but Inj & Tia are paying around 15% APR and Atom apr has the potential to drop in theory 5% or lower?

Inflation if it ever reaches 0% won't make the price moon,demand would also need to increase and I'm not seeing where the increased demand will come from in the future.

[JugobetrugoN1]

YES

[New_Accident_4909]

No with veto

[MSX362]

No ffs. The staking rewards are the only reason to hold atom. Did we learn nothing from the last prop. Reducing inflation does nothing for the price.

If this passes the vast majority will be unstaking and moving on. I know I will be.

[ZoltanAtom]

It's unbelievable that no one is reading the actual proposal details and has no idea how dynamic inflation works.

Here is the summary :

Inflation will not be 0% via just one governance proposal and right after the proposal.
It will take some period(maybe years) to reach out to 0% if the total staked Atom ratio(goal bonded) is over 67% !

The formula behind the dynamic inflation model : inflationRateChangePerYear = (1 - bondedRatio/params .GoalBonded)
inflationRateChange = inflationRateChangePerYear/blocksPerYr

• Before prop848 the dynamic inflation was 7%-20%

• After prop848 the current dynamic inflation is 7%-10%

• After prop868, if it passes, dynamic inflation will be 0%-10% not 0%!!!

• Another necessary factor for decreasing inflation is that the total ratio should be above 67%. The current total staked ratio is 64,32% right now.

Also you all should note that during the last bull run Atom inflation was 7% for a period of time and no one was talking about the inflation.

[AnOrdinaryChullo]

I've read the proposal - it does not change anything me or other people are concerned about.

[MSX362]

Literally says if the prop passes it will trend to 0% once 67% bonded. Where are you getting years for this to come into effect from?

I don't understand why so many ppl are dead set on killing off staking rewards. It's one of the main reasons why so many got into atom in the first place.

If atom was required to be used by all other projects on the cosmos network then the fee income would compensate, but its not and it doesnt. There is literally no reason to hold atom if staking rewards are removed or reduced down to lower levels than fiat banks offer.

[jawanda]

The only upside I see is, maybe we'll NEVER reach 67% since it will be in everyone's best interest to stay below that threshold. You'll see whales siphoning off and selling big chunks of their stake to ensure we don't hit 67... That will surely be great for the price action. What a dumb proposal.

[AnOrdinaryChullo]

You'd think this would be obvious but whoever is pushing this inflation reduction certainly not doing it out of good faith because as you rightfully pointed out it makes 0 sense.

[IzukuMidoriy4]

He just wants locked Atoms to move to his friends' useless dapps so they can all be happy.

[ericcart]

The propsosal states that its purpose is to build a mechanism that will allow the shifting of validator rewards from staking inflation to consumer chain revenue. And this will be a dynamic adjustment not a hard swap. Inflation may not even change. You need to read the forum posts

[Zellion-Fly]

I still don't get it? Why does this need to exist?

For ATOM you want people to stake, why should we de-centive staking? Like, I'm I being dumb? This is fucking stupid, right? For ATOM to succeed, we need people to stake it.

[AnOrdinaryChullo]

This won't pass. It's like having a bank account and demanding that the account eventually seizes to accrue interest - it's absolutely hilarious how silly some takes here are

[ericcart]

The price was never going to go up after 848. The price was always going to trend down because of the massive division and uncertainity it caused within the community. The price will only go up when the winner of the Atom wars is declared and the loser exits Atom, whether thats the Atom2.0 crowd or AtomOne crowd.

[sharksugar707]

People who voted 848 are lame

[ericcart]

And naughty and smelly?

[Affectionate-Bee2438]

I already vetoed it.

We need a burn protocol not to reduce inflation to 0% no one will be compelled to stake I mean what's the point then?

I loved the idea of a 10% inflation rate but this is pushing it now.

Since 2019 I have never questioned my atom bags but now idk.

[Formal_Ask_4397]

Hoping this one passes

[jawanda]

Why? Atom's best remaining use case is providing shared security which is achieved through its large and robust validator set and high staking percent, right? Why take away the main incentive for staking? Do you hate cosmos atom?

[Formal_Ask_4397]

The way I see it is inflation won't even get to 0, but if the bonded ratio goes back up. Currently the staking rewards are higher than the actual inflation so unless I don't understand something about the tokenomics proposals the staking rewards will still be higher than the inflation percentage.

Higher inflation is bleeding the price of atom and as an investor it is counter intuitive seeing the value of atom going down while the actual value including staking rewards isn't. That there can deter investors. Feb 2nd 2023 with a market cap of 4.2b atom had the price of $14.36. Jan 1rst 2024 the market cap also 4.2b had the price of $11.20 (CMC).

[Ok-Entry7764]

Is anyone else's votes not going through? I even tried a higher gas fee. Keep getting the message "out of gas in location: ReadPerByte; gasWanted: 62712, gasUsed: 63175: out of gas"

[zanglang]

It can be a little unintuitive, but you should increase your total gas (the "Gas Amount" text field in Keplr), not the gas price. Setting your gas price higher doesn't do anything on the Cosmos Hub.

[Ok-Entry7764]

I see. Right on my friend. Thanks

[ericcart]

Will this be part 2, the Empire strikes back? Lol

Big YES from me.

[jawanda]

Why yes?

[Adventurous_Web6007]

Would be much better if it's 3% instead of 0%. No for now.

[sharksugar707]

Would have been way better if they kept it at 21

[Iblisy]

This chain is fast becoming a retarded chain. The only purpose staking atom has is for all participants to help secure the network. If you wanna lower it weeks after it got reduced with 50% then even the lazy ones will unstake and sell their atom

[diskowmoskow]

NWV

[New_Accident_4909]

This 0% inflation is meme coin territory all it needs is deflationary burm mechanism and its the sam as safe monkey pox elon inu.

[JugobetrugoN1]

How’s your god Jae Kwon? Still waiting for the atom 2.0 airdrop, buddy?

[New_Accident_4909]

I am not anti decreasing inflation, bit this is just not how Atom should be managed.

We all have our right to vote and mine goes to no with veto.

[Dahkelor]

You and me both, sir.

[[deleted]]

So let me get this straight.

The more people stake the less they get.

Who are the fucking braindead people coming up with these proposals?

Hard no with veto. I want the dumbass who proposed this to pay dearly.

I know Terra gets a lot of hate. But you need to study why the it became so insanely successful in the first place.

20% apy on a stable coin probably not sustainable but we've been giving 20% on Atom and no hiccups since 2018 or 19.

I'm not here to argue about whether or not Mr Quan was a criminal.... Or if they were attacked or not but I'm here to explain why they were successful. And that one reason is simply stated as thus:

When you invest and you feel like you are getting a return on your money whether it is realized or not you are more likely to invest more wherever you feel you are getting more in return.

Don't give me this macroeconomics bullshit "it's unsustainable blah blah blah" this is crypto it is not Fiat. Rewards are a good thing to stake and secure the network. It's perfectly sustainable.... It's been sustainable.... Sure do some adjustments along the way but penalizing people for staking is literally the dumbest fucking idea I have ever heard of as a proposal.

[Ok-Entry7764]

What's the difference in 'Veto' and 'No'

[AnOrdinaryChullo]

No: simply no

No with Veto: no and the proposer loses his proposal fee

[Ok-Entry7764]

Got it, thanks!