During the current bear market blockchain communities have been carefully interrogating network costs. For Proof-of-Stake chains one of the largest costs is their validator set (and for good reason, as they run the chain and provide network security).
If we take the corollary of sovereign currencies, one of the main governors of monetary health is the interest rate. Adequately setting interest rates is as much art as science, as there are too many positive and negative feedback loops to fully understand the ramifications of any given change. That said, it is still one of the best ways of managing a currency system.
Moving to Proof-of-Stake chains, our governors are the on-chain parameters. Here are the current parameters for Regen Ledger:
“params”: {
“mint_denom”: “uregen”,
“inflation_rate_change”: “130000000000000000”,
“inflation_max”: “200000000000000000”,
“inflation_min”: “70000000000000000”,
“goal_bonded”: “670000000000000000”,
“blocks_per_year”: “4360000”
}
We don’t need to touch ‘mint-denom’ or ‘goal_bonded’, but we should consider the rest.
The parameters, to my knowledge, have been inherited from the Cosmos Hub defaults (although Cosmos Hub has since made some adjustments to their own parameters).
Our Max Inflation is currently 20%, our Min Inflation is currently 7%, and we have a 13% annualized inflation rate change.
I would propose we consider halving the inflation rate, and quadrupaling the inflation rate change, for the following figures (of course, if you have a better proposal, please note it below):
“params”: {
“inflation_rate_change”: “260000000000000000”,
“inflation_max”: “10000000000000000”,
“inflation_min”: “35000000000000000”,
}
(You might ask how changing the ‘inflation_rate_change’ from 13% to 26% is a quadrupling? This would be because the difference between 20% and 7% is 13%, when the difference between 10% and 3.5% is 6.5%, so simply by halving inflation, we’d already effectively be doubling the ‘inflation_rate_change’. If any engine