high inflation has a really big incentive. However, this is not the case with onomy. Because a lot of people don’t know about apr. My suggestion is to offer this apr to cex and show apr to real customers. Few people know in the current situation and there is no incentive to take the nom. Especially sales, which I believe are from validators, are suppressing the price. I definitely believe that apr should be advertised
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I think about 10 per cent is appropriate. First of all, I think maintaining the price of tokens is the most important!! That’s a good idea
I believe that maintaining the price of the tokens and increasing the demand has to be the most important thing for the project to be sustainable over time. But I also think that the APR% could be lowered for those with thousands or millions of NOMs and keep a slightly higher APR% for those with only hundreds of NOMs. Thank you very much for giving us a space to say what we think.
This is a valid point. Certain validators have been taking their rewards and taking advantage of retail exchange buyers. Sadly, this won’t change if the APR is lowered. Those validators that are doing this are in it only for short term gain.
In my opinion, the improved decentralization is achieved by having more validators, so the reduction of staking rewards to the default range of Cosmos SDK ( 7-20%) and the minimum requirement of 225,000 NOM, does not encourage becoming a validator. On the other hand, at the moment, the demand is only for the appetizing APR. The adoption will come when we move forward with the project, you have to be patient, we are in a start-up that needs time to develop. Thank you.
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Hello everyone I would like to express my subjective opinion on this proposal.
I really want to find out the true motives of this offer, because I perceived this offer through the prism of my own observations and life experience, and it seems to me that the team is concerned about the price of the token on the exchanges. She is falling, the team decided to influence this process. The question arises: is the price at the moment such an important indicator to worry about? I think not.
The next stage.
Please imagine yourself in the field with a bag of money. Where in the field can I spend money? There are no shops, cafes, bars, car dealerships, there is nothing, there is grass and dandelions. So at the moment, the field is our entire blockchain. What can we do with the token? Active interaction is staking, nothing more. There is no other use. Naturally, when people receive new coins, they take them and send them to the exchange. They have nowhere to spend them inside the system. The focus of attention should be directed to keeping coins inside the system using applications, in these applications people should spend coins not only from staking, but go and buy on the exchange, log in to the system and spend further. These should be common everyday applications for everyday use. It can be a VPN, a proxy service, a social network with a monthly subscription, a data center for successful traders’ wallets, training and advanced training courses, job search, all these services should work on the blockchain and charge a fee. I don’t see the difference between a large percentage of APR and a small one, if there is a real application in the blockchain, if there is a real need on the part of the mass of people.
Next.
Do you think that such a decision will not cause the following consequences: at the moment the token on the exchanges will collapse? For example, if half of the users are attracted by such a percentage and they are willing to take all risks just for the sake of a stake, then after taking such a vote, they may decide to withdraw their tokens from the system and send them to the exchanges, since they are not interested in an income of 20 percent. What will happen in this case? We will collapse even more. And if there are no new users, then stagnation will continue, only at new price lows.
I think that my next idea will seem to many to be completely absurd, but I will say it anyway. I propose to make a staking repository, all the rewards from the staking will be placed in this place. The awards will be there until the moment of voting. Voting can be held every six months. Several parameters are displayed for voting: 1. the possibility of transferring awards to their owners, 2. what percentage of the awards we transfer 10-20-100… Here you can also fasten the parameter of the exchange price, below which the repository will not be active for withdrawal of funds. Further, in order for money not to lie idle (everyone knows that money should make new money), the repository can organize grand programs for new projects, and each award winner can and should make a decision in transferring their funds to a specific project for development. This will not be a general vote for or against the project. As a voting participant, you can send part of your awards to one or more projects. In this way, pools of grandees will be formed. My theory is crude and needs to be specified, but the general view is something like this.
And finally… Look. Is it worth changing the rules of the game at the very start? Will it have any effect on the image and authority of the team?
I respect the work of the team with all due respect. If something seemed rude, then it’s just an incorrect work of the translator.
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totally agree with him
Hmmm seems this hard coded protocol logic of dynamically adjusting inflation the programmatic way outlined in the docs (link below ) is needing to be changed by human intervention ( community vote) because of some unforeseen market dynamics?
TBH I was looking forward to an indefinite stabilization period when it kicked in…….should devs adjust the perimeters that balance this inflation mechanism so it can still re-calibrate based on the code governing it - maybe 50+% of all $NOM staked being the trigger was to aggressive……
Inflation Rate: Dynamically adjusted rate that undergoes an initial hyper-inflationary period followed by an indefinite stabilization period with a goal of 50%+ of NOM staked with nodes.
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Great analogy : ) agree with your main point that the utility for NOM is limited to staking and now speculative activities on CEXs - if NOM gives you a share of fees trading on the Onomy exchange (ONEX) and or access to LP opportunities and gives seamless access to a multi chain world then this might incentivize a greater number of actors to be investors over speculators- it could be that the bootstrapping hyper inflationary period incentivizes can only end once another feature is rolled out or we will see further decline in sentiment which in term will be reflected in the short term price until the market sees features or products that drive that investor behavior that will reflect in up trending price action
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If we have 50+% of NOM staked should we not be seeing the APR peak in the rear view ? ( the docs touch in this mechanism but lacks specific detail) It seems like the APR it is going up higher for longer which as you pointed out is a good thing until the road map spits out some of the more core products to ensure the market participants incentives to align with the protocols after this bootstrapping phase : ) oh I can see in the image it would peak at 150m then begin the right side of the bell curve and currently we are at about 130m nom issued so no real relationship with the staked amount and the curve ……given it has taken about 130days to get here on the curve how much longer until we are at the 250m nom issued point - seems it could be a year or more -ideally APR should fall incrementally until the staking rate drops to or below 50-60% range and rise again if staked rate goes above 60% Range - the core mechanism was to achieve 50%+ or more staked nom which worked well but If concensus reverses the mechanism now and staked rate falls and price crashes you look like the fed haha! Maybe need a equilibrium mechanism which I gather was the roadmap kicking as the hyper inflationary period did its thing to bootstrap everything but this was always going to lead to a falling exchange price if the product roll out fell behind the printing rate ( just doing my best weekend armchair economist : )
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Hello @DeFi_NOMad! Inflation Rate is just one variable to calculate the staking reward rate. The calculation is as follows: staking reward rate = inflation rate / staking ratio whereby the staking ratio is the amount of NOM being staked out of the total supply.
Current numbers at ~130.4M total supply are 92% inflation and 80% staked, so we would divide .92 by .80 to see the current ~115% staking reward rate. You can use this same calculation at different variables. Elevated inflation would remain for quite some time before subsiding.
Of course, this is not a team decision. It is a DAO decision. Founding team physically cannot pass this vote ourselves. Hence the discussion here - even team members have differing opinions!
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Thanks Lalo / understood -
Onomy launched at 100m in early December so it was well up the left side of the curve at launch
Now it is at 130.4m and the hyper inflationary peak is around 150m look at the bell curve diagram ( see below) but it only goes to <100> with the right side of the curve ending at around 250m at some future point in time……
In about 130days since main net launch the protocol has added about 30m Nom to supply ( 30%) ( very rough estimate as about 2.7m came from BCO side etc )
with the goal being another 120m NOM being added to supply via inflation policy (and likely over a year of hyper inflation)
( these are just rounded numbers so i don’t have to get out of my lazy boy arm chair ; ) I think I have a handle in the concept now thanks!
I fully agree, inflation is very high and unsustainable. Nom has to be deflationary.
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Perhaps it makes sense to consider something in between the default staking percentage of Cosmos SDK and the high percentage of staking according to the current formula?
For example, the current formula can be additionally wrapped in an additional coefficient with a direct relationship to the inflation rate.
Staking reward rate = (inflation rate / staking ratio) * coefficient
The coefficient will be calculated as follows:
- There will be a static parameter, where 100% inflation will be equal to a coefficient of 0.5
- There will be a static parameter, where 0% inflation will be equal to a coefficient of 1
These parameters I have indicated as an example, they may be different and are subject to discussion in order to properly adjust the staking reward rate.
Formula: Coefficient = (200 - N) * 0.5 / 100. Where N is the percentage of inflation at the current moment
Formula example:
-
For example inflation is 100% and staked coins is 80%.
Factor = (200 - 100) * 0.5 / 100 = 0.5
staking reward rate = (1 / 0.8) * 0.5 = 62.5% -
For example inflation is 70% and staked coins is 80%.
Factor = (200 - 70) * 0.5 / 100 = 0.65
staking reward rate = (0.7 / 0.8) * 0.65 = ~56.9% -
For example inflation is 30% and staked coins is 80%.
Factor = (200 - 30) * 0.5 / 100 = 0.85
staking reward rate = (0.3 / 0.8) * 0.85 = ~31.9%
Thus, when inflation tends to zero, the adjustment factor will also tend to 1. This will reduce the hyperinflationary rewards, but leave the reward percentage high enough and not violate the logic of the current inflation schedule. Also, the coefficient can be made non-linear, and for example along a bonding curve (to be discussed).
But if I have to choose between the options to leave it as it is or set the default reward as in the Cosmos SDK, I choose the second option to stabilize the NOM price.
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Great suggestion I think this kind of solution makes a lot of sense. It seems the whole purpose of this hyper inflationary period was
- to incentive users to stake ( security) over 50+% of nom supply and to
- reward early adopters while
- bootstrapping the protocol until more products providing utility are launched.
So in theory If these pre requisites are met by the protocol at any given point during this period then the inflation/ apr should start to decrease using a suitable formula but for example if total staked NOM falls below a certain % level there maybe need to be a mechanism to incentive users to stake until a certain ceiling of total nom supply is reached so it would rise again much like the difficulty rate for POW mining increase and decrease with the network hash rate flows and ebbs - the biggest unknown here is the reverse effect of stakers unbonding and selling tokens due to a lack of utility in the short term exasperating one of the issues trying to be reigned in
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I am ready to agree with manipulations with inflation rates only if someone answers me one stupid question: why buy a nom now? If there is no adequate answer, then we are just trying to lower the number of coins that will get on the exchange. What is the difference between “no one wants to buy 100 coins” and “no one wants to buy 20 coins”?
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Good answer. I think so too. Perhaps the team expected that there would be more purchases than there were through BCO and thereby overcome hyperinflation faster, but this did not happen.
Let’s take a look at who these people are who can withdraw their coins from staking and sell them due to the reduction in staking rewards.
- 2.7 million tokens. These are the people who purchased through BCO.
- 33 thousand people are registered in Zealy. Let’s conditionally imagine that each of them received 15 NOM. It turns out this is almost 500 thousand NOM
The rest of the tokens are in the DAO. Also, most of it belongs to “Backer, team, and advisor”, which are currently blocked and not available for withdrawal.
That leaves 20 million for (Ecosystem to support further decentralization of the ecosystem). But I don’t think that the tokens from here will be withdrawn and sold if the staking percentage changes.
To recap: Only 2.7M + 0.5M = 3.2M will be able to cash out after the staking percentage change (we can even aggressively round up to 4M with the rewards already received).
Is this 4 million will greatly affect the price? And that’s assuming everyone sells. I’m sure a lot of people aren’t here for the high staking percentage. And I think that at the moment a large percentage hurts the token more than the fact that people can start selling their 4 million tokens.
But since I like the idea of implementing a reward in Onomy, I will be committed to keeping this concept as a baseline, but slightly reducing the percentage of hyperinflation staking rewards by adding the dynamic coefficient that I suggested earlier (or any other way).
Only the initial issue of coins falls under lock, the rewards from the staking of these coins can be freely withdrawn and sold. It usually happens like this. So we are not talking about 4 million coins.
As far as I know, staking rewards are also locked.
Hmm… I think it’s worth requesting an official confirmation