Tokenomic to combat inflation

Is it possible to have proposal in icon 2.0 that node reward reduce annually ?
When looking at dpos asset like ICX, Trx, Xtz…1 common thing is coin issuance depend on staked amount. But staked % is variable. There are sell pressures always.

When looking at Ethereum, difficulty of mint new token increase over time. Cardano also have inflation reduction over time. Many other coins follow this model like Egld.
Icx holders may said Cardano is vaporware, no smart contract etc… but their tokenomic lead to narrative of ppl want to hold the coin as they have in mind that less coin will be minted over time.
For ICX, current narrative that ppl expect trx fee increase + BTP will bring transactions to outweight inflation. That’s still lots of speculation.
By having sure thing that inflation will be deducted overtime (& trx fee increase), mindset of ppl may change that icx will be scarced.

So scarity of ICX will be more of a sure thing rather than depend on variables like BTP, staked amount( of course we want BTP to success). But it may affect narrative of investors.


1 Like

I agree.

I love Icon but gave up on accumulating icx.

The speculation that fees + BTP will offset inflation is overly optimistic for current transactions.
Even if it is offset, if the icx price rises, it can lead to an increase in inflation.

Compared to the fixed maximum issuance, it is not attractive.

What matters is predictability.

When uncertainty is removed, the market rises.

How about this?

At present, it is virtually impossible for inflation to reach 0% in a few years.

If you are confident that your policy through inflation will succeed
I think that it is possible to reduce the present voting reward and increase the voting reward if there is deflation in the future.

Let’s reduce the current voting reward by 30%. (Excluding p-rep, p-rep has been reduced a lot so far. This time it’s the voters’ turn.)

Even a 30% reduction is a whopping 7%. It’s still attractive.

@Benny_Options would you mind considering this proposal?

I correct my statement that you can adjust the token supply later.
The token supply policy should remain unchanged.
If it changes according to the situation, it will decrease the value of the token.
I think this big upgrade of Icon2.0 is a great opportunity to change the token supply policy.

This is what I saw on dave’s Twitter.

Four year cycle theory is founded on the solid fact of halving. Every four years, difficulty adjusts and the supply of Bitcoin to the market halves leading to an eventual cap on the amount to be produced. On the chart, thanks to this cap, you see the rate of supply diminishing. This tapering off of the supply naturally [or artificially] creates a logarithmic growth curve - explosive growth at the beginning tapering off to a plateau at the end.

I was able to avoid the crisis this time thanks to dave.
he’s really cool

How about drawing a logarithmic growth curve with a clear token supply policy?

i like my idea frame. Kk

  1. Set the maximum issuance(1billion) and execute halving every 2 years( 2times )

  2. When the maximum issuance is reached, it operates with a network fee and btp

Not only half-life, I think 1/3 is good too

In the past my suggestion, Scott asked me if there was any way to reward block producers.

A clear supply decline supports and helps the token price rise. Therefore, I don’t think block producers lose money.

But If you run a half-life, I think we should increase a little the rewards of those who have reduced their rewards too much in the meantime, except for the voter rewards.

Bitcoin has a limited issuance, and although the supply of Bitcoin decreases due to the halving, I think there is a need for a reason to hold as if miners do not want to sell at a loss.

Sorry I did not see this sooner.

Currently, ICON 2.0 has a fixed nominal amount of annual inflation (i.e. 36M ICX per year), it’s not based on the amount of people staking or running nodes.

This fixed amount can be adjusted via governance. One thing to consider is to bake-in a constant decay on this overall reward size overtime, which sounds like a good idea to me. This proposal is a bit ahead of its time though. Please keep this in mind, and after ICON 2.0 launches and we get all the features stood up properly I’d be happy to revisit this.

Thank you for your contribution.

1 Like