Proposal: Lower Archway Inflation Rate

Proposals Proposal Discussions
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Proposal Details

Type

Param Change

Title

Proposal to lower the Archway protocol inflation rate

Description

Phi Labs, Archway core contributors, propose a lowering of the Archway network’s inflation rate. We propose a target inflation rate of 3% to ensure long term network sustainability and reduce token volatility.

Parameter changes

  • x/mint
    • inflation_max: “0.030000000000000000”
    • inflation_min: “0.002999999999999999”

Discussion

Please feel free to provide feedback, comments and suggestions in open civil discussion and/or debate.

We have only the best interest of our network and community at heart.

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Sustainability is important, but we also haven’t seen this play out super well in the Cosmos Ecosystem yet.

I get that this would accompany a reduction in validator set so as to try to not strongly impact at least the top validators, though it still would. Most relayers are being operated at cost by validators in the ecosystem, many of whom would likely be kicked out of the active set.

I’m not dead set against reducing inflation, but would like to know why rather than just saying that it’s sustainable and has community at heart.

Metrics I’d like to see more of; how much ARCH is actively being burnt? How many active users are we getting, and what level of usage would it take to combat this? How does Gas Guzzlers play into this, and are we seeing an uptick in usage from it? Does Gas get burned the same way from the platforms usage, and if so where does that come from?

I think everybody is upset at price action. Reducing ATOM inflation didn’t help theirs. Other chains that have had halvings and eventually get to a point of around 3% inflation are mostly dead at this point.

I’d love to see more validators and builders in the community weigh in on this, but also would like proper arguments from Phi Labs supporting this move.

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I caught the announcement from Adrian in the TG group and have been meaning to chime in for several days.

Is there a specific reason as to why 3% became the target number? How does the lower inflation reduce token volatility? We’ve seen other digital assets reduce their issuance via changes to the inflation parameter and it’s made no difference whatsoever.

Really missing the governance calls at this point, because I feel as if the community would have had some input before this being posted to the forum.

Will circle back for responses in a few days. Thanks!

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It’s been 11 days without response. Are you planning to move forward with the validator one instead?

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We seek to bring Archway into alignment with the general blockchain ecosystem. Most networks have significantly reduced inflation rates. This is true across different ecosystems ranging from Ethereum, Binance, Solana. Networks within the Cosmos space are also moving in the same direction. Evmos have recently reduced inflation to the same 2-3% level.

To maintain parity with the general ecosystem we want to reduce Archway’s inflation to the same lower levels of around 2%.

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Hey guys, we’re not a fan of unfairly migrating two proposals into one on chain, especially adequate discussion did not occur. We hope to see better feedback and discussion on these proposals and see them judged on their own merit separately. Until then, we’re voting no with veto, as the governance procedures outlined in the ratified ‘Code of Conduct’ were not followed.

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Let’s do what everyone else is doing so that we can be just as dysfunctional.

This is a terrible idea, imo. If Archway seeks to truly differentiate itself, it should not make the same bad decisions as other Cosmos L1 blockchains have.

Define “general blockchain ecosystem” - last I checked, blockchains were designed to be decentralized away from being “general.” To me, what this says is that you don’t wish to make Archway differently.

You citing Solana comes across as pretty tone-deaf at this point, considering that more than 50% of all SOL transactions fail, that’s a bad example of a blockchain to compare inflation rates with…They are not equal.

Binance Chain has remained extremely centrally-controlled, has less than 30 validators, and has extremely wealthy backers who have deep pockets.

Archway is not Binance. Once again, this is not a fair comparison to make. BNB has been trading on the open markets for years. ARCH is in its infancy, in comparison, and took such a fat dump on the market after that token unlock cliff, that buy pressure has not returned to make holding and staking the token very lucrative for investors or stakers.

Trying to force through lower inflation is a bad idea. You’re attempting to financially re-engineer a token that was actually designed really well. The blockchain, the L1, was actually designed Beautifully - which makes me question the real intent behind this move, and the combining of two proposals into one on-chain.

This behavior is very unprofessional, and gives me pause, as a governance participant and a community member. Phi Labs’ leadership needs to understand that this is going to harm Archway and all the DApps built on it.

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Founders thoughts

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Hey all…

I’ve been hearing a lot about what’s not working with our current system and this proposal. It’s great that we’re spotting these issues, but we’re not really coming up with any alternate solutions. How about we shift gears and start brainstorming ideas that help everyone and move our ecosystem forward?

AV is a massive part of Archway, and I know your thoughts have the power to change things. Let’s focus on shaping a better tomorrow instead of just reacting to yesterday/today. We can’t grow by looking backward; once some things are done, they can’t be undone. It’s time to come together, not pull apart. That’s “Growth 101”.

Sometimes, you gotta stumble to get back on your feet, and it seems like that’s where we are now. Let’s talk about what we CAN do that’s good for the entire ecosystem.

Remember, a good compromise means nobody’s walking away totally happy—you’ve got to give a little to get something great in return.

Looking forward to seeing what we can come up with that works for everyone.

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Thank you for posting this here. You said you’d reply on twitter (rather than the Astrovault telegram channel) but have not yet; regardless this is where the conversation should take place.

Here’s my response on twitter

Now going into your thoughts: only 3/4 of inflation currently goes to validators, so instead of $4M it should be $3M, the rest goes to the Dapp Treasury, which will hopefully be distributed to developers, as designed, with the next protocol upgrade.

Banks target 2% inflation: yes, but they measure inflation not by supply increase (monetarism) but by CPI, or the measurement of price. Were we to go by that metric, I’d love DEFLATION, or the price of ARCH to go up, I think we all would. If the implication is that lowering monetaristic inflation will raise the price of ARCH, I don’t think the other props we’ve seen (such as ATOM reduction) have shown that, but I’m personally more than open to experimenting.

I’d also love to see metrics on how much ARCH is being burned right now so we could see what monetaristic net-inflation is looking like right now, and get projections based on usage.

Lastly… as I mentioned on twitter, the parameter changes reflected in the on-chain proposal are NOT aligned with the intended parameters written out on the prop, or by you. The parameters are wrong. This needs to be re-uploaded.

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image1448×629 68.3 KB

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Absolutely Jay, our goal is to collaborate. It’s encouraging that traffic is being driven back here, as it should be, for proper discussions.

I’m personally inclined to vote yes on one, if not both, of the proposals once properly outlined! I don’t disagree with the intent, but rather the practice.

With the error in parameters, it’s an easy fix to shut down this prop, and go back to the ratified governance procedures, discuss both props individually as they were proposed, and get them back on chain, better itemized with solid goals and metrics, in the coming weeks. We then certainly would not veto, but would also likely vote Yes.

Insinuations made by Founders in the Astrovault telegram made it seem like Astrovault was worried about short-term revenue projections from inflation. I can assure you nothing is further from the truth, and any and all arguments I’ve made have been solely with my Archway hat on, aiming for the best for the network, independent of Astrovault’s considerations, as we want Archway to succeed.

Let’s start over. Let’s start fresh. Let’s collaborate. Let’s do things fair, properly, and follow the decentralized processes. We need to collaboratively showcase the process we expect others to follow.

2 Likes