My proposal:
I suggest we cut in half the Radix network emissions to stakers and the subsidies to validators. This could save us $1M/year of sell pressure on the price of XRD. Specifically I propose the Foundation change emissions/subsidies to:
- new emission rate: 150M XRD per year (saving ~$800k/yr at current price)
- new subsidy rate: $250 of XRD per month per validator (saving ~$200k/yr)
I can think of many reasons:
- Many who collect these emissions and/or the subsidies (paid in XRD) turn around and sell that XRD to pay their expenses and make what profit they can of it before the price drops further. By reducing that amount available to sell, we reduce the rate of decline in the price. Lower supply generally means higher price.
- Higher price of XRD helps more than good marketing. Many don’t dig deep into Radix because of the toxic-looking price chart trending down for the last four years. People want to buy and hold if the price is finally rebounding.
- The subsidy plan was offered as a possibly temporary band-aid to encourage reaching 100 validators. It wasn’t meant to last forever.
- The reduced income for validators can be made up by increasing validator fees. I’ve observed fee changes (say from 2% to 10%) is much more helpful to the validator than a detriment to the people staking to that validator.
- Validators could/should discuss among themselves all the ways to reduce operating costs so that $250/mo + fees is enough, especially knowing we might see higher prices due to this proposal.
- We are running out of time to do something. The 1B XRD incentives program will soon be flooding our DEXs with even more sell pressure. How beautiful it would be if we could show before then that we have turned around the price chart and that people need to start hodling their XRD, instead.
There are some temporary reasons against:
- Some will reduce their participation in Radix. But then again, once the price rebounds, some will return and more.
- Some will choose less powerful validators with less bandwidth, etc. – lowering Radix network security and/or performance. I’d argue we are seeing some of this anyway with the price drop trend. A new trend (up) will help improve our network automatically.
- Staking APY will drop to ~3%. But there are now other ways to achieve higher APY with your XRD - such as providing liquidity and/or lending.
- Less stake will make it easier for malicious POS attacks against Radix. But just one doubling of price will make up for that.
Next steps:
I am asking others to opine on this proposal and if well received, that we ask Radix Foundation to consider doing this, along with any other ways to reduce XRD selling pressure.
-thank you for your attention to this proposal,
-wingspan.