(Proposal) Inflation and community pool changes

Thank you @guy for bringing this to the community’s attention. I would like to respond from the perspective of the Secret Foundation. Obviously, we are aligned on the idea of the foundation fee, with the emphasis that only the Foundation (as a transparent, regulated, non-profit organization) will receive this fee. I do have more thoughts on how this can and should be implemented below.

Inflation: this range seems reasonable to me, with the acknowledgement that we will likely stay at the high end of the expected range for a long period of time until more staking power comes online.

Community fee: I agree that the current fee is far too high and that the pool is already well capitalized. However, I have one other suggestion in addition to your thoughts. The Foundation is currently not receiving any funding from the blockchain and will not be able to do so until such time as a module is built to resource it directly. In conversations with validators, we have converged on a 20-25% range for a share of network rewards flowing the foundation. This figure ensures the self-sustainability of the foundation and its ability to perform critical actions (focused on education, awareness, adoption).

My proposal is that 20% be added to whatever figure we reach as a figure for the on-chain community pool tax until such time as a module is created to fund the foundation more directly, at which point another proposal would be made to add this module and remove this 20% from the tax. For example, if we determine 5% is a fair figure for a community pool tax, then the proposed figure now should be 25% community tax, adjusting to 5% after the module is successfully built and proposed. That way the impact on validator returns is the same both pre- and post-foundation module creation (25% lower than inflation alone would suggest). This all ensures more resources are available for the direct benefit of the community and ecosystem.

Foundation fee: see above. I am currently looking to identify individuals who would be willing to build this module for the network, which is a task that should in my opinion be funded via the existing on-chain pool.


To conclude, here would be my suggestion for an immediate proposal:

Inflation: 7-15% range
Community Pool Tax: 25%, immediately adjusting to 5% after the creation and successful proposal of foundation tax module.

Validator ROI will remain exceptionally attractive until the staking rate increases. Staking rate will have far more to do with ROI than inflation / tax rates in these ranges (and this is by design). So I certainly don’t think a higher tax in the short term is a bad thing, especially as it is acknowledged to be temporary.

I welcome all thoughts!

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