I agree that reducing inflation is critical for sustainability, and this proposal addresses that perfectly. However, I share @you425’s concern that while inflation mitigation is essential, it is only one side of the equation; the other side is the usage of the token. As mentioned by @you425, if we do not concurrently establish strong and robust mechanisms to increase demand for $ASTR, we will ultimately be heading toward our own downfall.
While I understand that your proposal focuses solely on inflation mitigation (taking it one step at a time), in my opinion, we should also work on the other aspect (mechanisms to increase demand) to ensure we are prepared, if not already operational, when we deploy Tokenomics V3 on the mainnet.
Additionally, @you425’s proposal to ultimately limit inflation to a very low rate (0.5%) instead of a fixed amount of tokens could be a viable alternative, provided we manage to implement mechanisms that generate enough BB&B to absorb the remaining inflation (similar to what was observed on Ethereum last year).
I would like to address a small misunderstanding between the two of you regarding LST dApps such as Neemo, Astake, and Algem.
LST protocols finance themselves by taking a percentage of the rewards generated by their interest-bearing tokens (the industry average is about 10% of the incurred interest). Therefore, their models are typically self-sustainable if sufficient adoption of their LSTs is achieved.
The CoC prohibits the use of dApp income as their primary or sole source of income. As you both can see, LST dApps do not conflict with this requirement since, in theory, their main source of income comes from the fees collected on user rewards generated by their LSTs.
Additionally, each LST token can be viewed as a combination of 1 ASTR plus its staking rewards since minting. Thus, whether the dApp is part of the dApp staking system or not does not change the fact that, ultimately, the yield on the LST token originate from the staking of user ASTRs, not from the dApp staking income’s.
It is worth noting that some LST protocols, such as Astake (I am not sure if Neemo or Algem do this as well), use a portion of their dApp staking income to slightly increase the interest rate of their interest-bearing tokens as an incentive for adoption. In the case of Astake, this portion was discussed beforehand with the ACC during the dApp staking program integration assessment and was deemed acceptable, as it promotes additional staking without hindering the dApp’s capacity to remain sustainable and develop.
@Adam_Astake please feel free to correct me if i’m missing or am mistaken on something
@Mouthmouth68 san. You are absolutely right. Astake is sustainable through fees taken from user-generated yield. We do not rely on dApp staking rewards as our primary or sole source of income.
And yes, our plan to allocate a portion of our dApp staking rewards to enhance APR is a deliberate incentive designed to attract more users and promote broader ASTR staking. This approach has been discussed with and approved by the ACC.
While changes in APR may influence user returns, they do not have a significant impact on our user base. LST projects remain attractive as they offer users greater flexibility and improved capital efficiency - and promote additional staking.
Since the day it was discussed on the forum, the change in tokenomics has been embraced by the Turkish community. Although there is no visible price movement (due to the general market situation and the high dominance of bitcoins), they are happy that the supply has been limited. For many years, many community members have been demanding a limit on supply. Apparently, this development has taken hold in the community. Thanks again for the suggestion!
