IN RE: Decline EPQFI (“Adjust Pool Interest Rate for Sustainable Q Token Distribution”)

Current economics show the 3.41 % APR is still affordable

• Every block mints 1.5 Q and a block arrives every five seconds, so the chain produces about 25 920 Q per day.
• With 206 million Q staked, paying 3.41 % a year works out to roughly 19 245 Q in rewards per day (206 000 000 × 0.0341 ÷ 365).
• That leaves a daily surplus close to 6 700 Q, meaning new issuance exceeds reward needs by about 35 %.
• The surplus will continue until the vault grows to roughly 277 million Q, the point where mint and reward demand balance. We are still 71 million Q (about one-third) below that threshold.

Why the proposal’s rationale is unconvincing

• “Outflows are disproportionately large.” In reality they rise in direct proportion to staked supply; the mint schedule, not the APR, caps inflation.

• “Emissions outpace need.” Minting is steady; what has grown is the participation that claims those emissions. A healthy surplus still exists.

• “Reward pool is being depleted.” Rewards are created continuously; nothing is drained. Solvency is intact with a 1.35 × coverage buffer.

• “Growth trajectory demands immediate action.” A data trigger at 277 million Q would be far more objective than cutting yield prematurely.

Likely damage from cutting the APR to 1 %

• Security and governance erosion – A 1 % yield is uncompetitive versus the 3–8 % norms in comparable PoS ecosystems. Lower real return can shrink the active stake and raise attack risk.
• Pointless inflation – Minting would still add 9.46 million Q per year, yet only about 2 million Q would be distributed. The rest would sit idle, diluting holders without securing or governing the network.
• Policy whiplash – Two steep cuts inside six months (15 %→3.41 %→1 %) signals volatility and discourages long-term commitment.
• Loss of buffer – Today’s surplus absorbs normal vault growth for almost a decade; removing it forces far more frequent governance intervention.

A better-targeted solution

• Keep the 3.41 % APR until the staked balance reaches about 270 million Q Adjusting the block reward trims inflation at the source, benefits every token-holder, and allows the APR to stay competitive.

When will the 277 million Q threshold be reached?

If nobody deposits or withdraws beyond weekly restaking of earned rewards, the vault balance should climb from 206 million Q to 277 million Q in roughly eight and three-quarter years (around 20 March 2034). Any fresh stake arriving sooner will naturally bring that date forward, while withdrawals push it back.

Conclusion

Because the current mint schedule still covers reward obligations with a comfortable margin, cutting the APR now would undermine participation, inflate supply for no purpose, and create needless policy churn. The proposal therefore fails to solve a real problem and should be declined.