Community Tax/Inflation Parameters (open discussion)


I bring this topic here for open discussion regarding setting new params for the following;
-Community Pool (currently 2%)
-Foundation (15%)
-Total bonded rate, negative inflation mechanism (67%)

I would urge prudence when thinking about making changes to these params, as I’m sure we all agree the economics of a project will make or break us long term.

I’ll pick these off one by one and throw my opinions in the ring.

-The community pool will have increased usage due to committees going on-chain (experimentally for now) and increased demand for various reasons set forth later on in this thread. I say we increase this param. I suggest 5%

-The Foundation tax is harder for me to gauge given the concern with confidential information leaks and certain company dealings that require discretion. There is also a growing community sentiment that the foundation model is not the best path forward albeit a minority voice at this time. Having said that I’d like to use this param change as a chance to change the narrative of the Foundation back towards one of collaborative growth within the community. In short I would like to see the community and foundation pools work together in tandem. Each pool has their own pros/cons, speed at which capital can be deployed and nuanced disclosure requirements etc. I would also like to suggest we set up an unpaid oversight committee for Foundation spending that includes trusted community members (NDA’s ?). This would give increased confidence in the trust model and possibly solve many community transparency concerns.
I say we decrease this param. I suggest 7-10% range.

-Bonded rate (INFLATION) As of now I suggest we leave the bonded rate as is or decrease this param ever so slightly. 2% max drop at this time. I am going to take out my crystal ball and admit I don’t have enough data to determine the source of true downward sell pressure. I don’t think rewards coming from bonded accounts selling is the culprit. We want to maintain the highest ROI and prevent unbonding for a plethora of valid reasons. If we assume more exchanges are coming, and those new exchanges, along with Binance will eventually offer staking. Then my only conclusion is that we will hit our bonded rate sooner than later and inflation decreases from there. This is why I would hesitate on making changes that hasten this deflationary event.


Jay | 𝕊hadowRealm | 𝕊CRT Node


Hey Jay, thanks for creating a platform to discuss this. I’m hoping that a Proposal can be made to at least agree levels even if we’re not implementing this immediately (could agree a date in the Proposal).

  • As per my suggestion in the Governance Channel yesterday, I think 12% inflation is a healthy level (a 3% drop, not far off what you noted).
  • I agree with your view on the Community Pool to the extent of increasing it to 5%;
  • I also do think we should decrease the Foundation Tax due to greater utilisation of the Community Pool (including the adoption of committees). However, we should be careful and note that a decrease in inflation as well as a decrease in allocation are multiplicative and therefore I think decreasing it to 10% might be too much and therefore offer a middle ground of 12%.

I want to use this as a place to note that I think adjusting the Bonding Rate is a difficult way of decreasing inflation. I have spoken to various people including @reuven and @assafmo who have noted that the Bonding Ratio is 67% inherited from Cosmos but we don’t really have more knowledge regarding healthy levels or what the minimum should be (apologies if I misconstrued words, please feel free to correct me).

In that regard, changing the bonding rate curve is just another arbitrary process of picking two points that we don’t know why we want there. So why do we need to make it complicated by using this method when we can simply make a simple shave the max inflation and keep it simple.

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Hey i’m wondering if there’s a current public site I can goto that shows the tax collected so far and what it’s been spent on?

I think the tax has done marvelous things for the Secret Network but have noticed a lot of debate that has caused negative sentiment amongst the community regarding the spending of those funds.