# Updating Parameters: Lowering Inflation And Related Issues **URL:** \ **Category:** Governance\ **Tags:** parameter-change\ **Created:** [November 7, 2023, 5:26pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94 "2023-11-07T17:26:57Z")\ **Posts on this page:** 9\ **Page:** 1
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [November 7, 2023, 5:26pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/1 "2023-11-07T17:26:57Z")
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 ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [November 7, 2023, 5:31pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/2 "2023-11-07T17:31:50Z")
You can learn more about the mint module [here](https://docs.cosmos.network/v0.50/build/modules/mint). I’ll also note that all of this was discussed today in our weekly Tokenomics Working Group. If you’re interested in joining, please sign up [here](https://forms.gle/6kMbjdDKQtHNwvUf7)! ---
**Author:** ![Sarah\_Bax](https://avatars.discourse-cdn.com/v4/letter/s/2bfe46/32.png) [@Sarah\_Bax](https://forum.regen.network/u/Sarah_Bax)\ **Post date:** [November 7, 2023, 5:54pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/3 "2023-11-07T17:54:51Z")
Questions: - What are the technical requirements for this implementation? - How would this affect validator financial viability? - How would this affect the overall REGEN supply, and what is the potential price effect over time (6 months, 1 year, etc.)? ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [November 9, 2023, 4:53pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/4 "2023-11-09T16:53:14Z")
A few more APR comps: - Quasar—5.8% - Stride—3.25% - Agoric—11% - Akash—10.2% - Axelar—12.6% - Cronos—8.5% - IRIS—10.5% - Sommolier—8.7% Of course, there are many chains with comparable or higher APRs than Regen Network, but it definitely wouldn’t be a crazy idea to half inflation; this has already been implemented in a number of communities. ---
**Author:** ![antoniusaurelius](https://avatars.discourse-cdn.com/v4/letter/a/a9adbd/32.png) [@antoniusaurelius](https://forum.regen.network/u/antoniusaurelius)\ **Post date:** [November 13, 2023, 9:16pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/5 "2023-11-13T21:16:23Z")
A meaningful and useful comparison might be PLASTIK on Celo, which has a range of APY up to 12-15% for a six months to a one-year lock-up, and higher single digit for staking with no vesting period. Plastiks has similar market cap as Regen has and is building a marketplace for plastic recovery. ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [November 14, 2023, 4:14pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/6 "2023-11-14T16:14:17Z")
On the tokenomics call today, Jacob pointed out that some people in the Cosmos Hub community have proposed only increasing the rate-of-change, rather than also reducing inflation (although others in the Cosmos Hub community have proposed a halvening). I pointed out that the REGEN staking rate hasn’t historically been consistently above the goal of 67%, so only increasing the rate-of-change might increase rather than decrease inflation. None of us on the call are aware of a way to view the entire staking rate history, although Jacob mentioned Smart Stake might be able to provide this data, so I’ve reached out. Gregory pointed out that often people don’t pay much attention to forum proposals until something is on-chain. So we might want to get something on-chain sooner than later to catalyze engagement. ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [November 17, 2023, 5:52pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/7 "2023-11-17T17:52:15Z")
Amendment to my proposal above. Apparently back in Spring of 2021, Cosmos Hub did some research on the “inflation\_rate\_change” variable and found that 1.0 (as opposed to 0.13) is ideal (please review the modeling and discussion [here](https://forum.cosmos.network/t/proposal-48-accepted-inflation-rate-change-correction/4834)). So rather than the 0.26 I mentioned above, I would suggest we follow the Hub’s lead here, as the adjustment seems well-reasoned. “inflation\_rate\_change”: “1000000000000000000”, ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [January 30, 2024, 4:35pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/8 "2024-01-30T16:35:46Z")
Update here—the inflation rate-of-change parameter was successfully updated to 1.0 (thank you Informal Validation team for getting this up on chain!): [https://www.mintscan.io/regen/proposals/38](https://www.mintscan.io/regen/proposals/38) So at this point what is left is a proposal to address min and max parameters. ---
**Author:** ![Will-Regen\_Foundation](https://avatars.discourse-cdn.com/v4/letter/w/e95f7d/32.png) [@Will-Regen\_Foundation](https://forum.regen.network/u/Will-Regen_Foundation)\ **Post date:** [February 29, 2024, 8:11pm UTC](https://forum.regen.network/t/updating-parameters-lowering-inflation-and-related-issues/94/9 "2024-02-29T20:11:14Z")
Min and Max inflation reduction proposal now live for voting: [https://commonwealth.im/regen/proposal/41-adjustment-of-minimum-and-maximum-inflation-parameters](https://commonwealth.im/regen/proposal/41-adjustment-of-minimum-and-maximum-inflation-parameters)