Conversation
There was a problem hiding this comment.
[blocking] the reference implementation code looks incorrect b/c it contains escape characters.
[optional] IMO the current CIP doesn't have a convincing motivation section. I think it would help to articulate clear quantifiable goals and how the proposed inflation schedule meets those goals. The proposed schedule seems a bit arbitrary.
cips/cip-29.md
Outdated
| Reasons for this CIP are: | ||
|
|
||
| 1. Current issuance is too high, especially in dollar-terms. We want to avoid accelerated dilution of non-stakers. | ||
| 2. To empower applications to compete effectively with staking yields. While it is important to maintain a high bond ratio to secure the network, we also envision a vibrant ecosystem of diverse applications emerging on Celestia-secured rollups. Using TIA as collateral onchain competes with staking yield and reducing inflation makes onchain use more attractive. |
There was a problem hiding this comment.
While it is important to maintain a high bond ratio to secure the network
Can this quantify a target bond ratio?
cips/cip-29.md
Outdated
|
|
||
| * The chain upgrade process includes the new inflation parameters without disrupting block production. | ||
|
|
||
| * The new schedule is included in the next voting proposal to reflect the updated inflation rates on-chain. |
There was a problem hiding this comment.
in the next voting proposal
What is the next voting proposal? Is this referring to a governance proposal?
There was a problem hiding this comment.
This probably meant to say
| * The new schedule is included in the next voting proposal to reflect the updated inflation rates on-chain. | |
| * The new schedule is included in the next major version release to reflect the updated inflation rates on-chain in the next app version (v4). |
Co-authored-by: Rootul P <rootulp@gmail.com>
Co-authored-by: Rootul P <rootulp@gmail.com>
Co-authored-by: Rootul P <rootulp@gmail.com>
This comment was marked as resolved.
This comment was marked as resolved.
Co-authored-by: Rootul P <rootulp@gmail.com>
|
The escape characters in the reference implementation. The second point about quantifiable goals is an optional suggestion. |
cips/cip-29.md
Outdated
|
|
||
| * The chain upgrade process includes the new inflation parameters without disrupting block production. | ||
|
|
||
| * The new schedule is included in the next voting proposal to reflect the updated inflation rates on-chain. |
There was a problem hiding this comment.
This probably meant to say
| * The new schedule is included in the next voting proposal to reflect the updated inflation rates on-chain. | |
| * The new schedule is included in the next major version release to reflect the updated inflation rates on-chain in the next app version (v4). |
cips/cip-29.md
Outdated
| | **0** | 8.00 | 8.00 | Genesis year, no change. | | ||
| | **1** | 7.20 | 7.20 | First disinflation applied (10%). | | ||
| | **1.5** | 7.20 | 4.82 | 33% drop in inflation applied, disinflation rate reduced to 6.7%. (This will be implemented in the next upgrade of Celestia) | | ||
| | **2** | 6.48 | 4.50 | Regular annual disinflation applied (6.7%). | |
There was a problem hiding this comment.
I'm calculating different numbers for the adjusted inflation. Here are the existing constants:
initialInflation = .08
disinflation = .1
The "New Adjusted Inflation" column is decreasing both of those by 33% so
initialInflation = .0536
disinflation = .067
The formula to calculate inflation rate in a given year is:
InitialInflationRate * ((1 - DisinflationRate) ^ YearsSinceGenesis)
let's skip year 0 and 1 because we can hard-code them to use the previous constants. For year 1.5
.0536 * (1 - .067) ^ 1 = 0.0500088
For year 2
.0536 * (1 - .067) ^ 2 = 0.04665821
which diverge from the values in the table.
There was a problem hiding this comment.
I think it's the formula that might not be correct. I just double checked the table in a spreadsheet.
There was a problem hiding this comment.
Yea my formula is incorrect.
InitialInflationRate * ((1 - DisinflationRate) ^ YearsSinceGenesis)
no longer works because this proposal modifies the inflation rate and disinflation rate for years > 1.5
There was a problem hiding this comment.
When I use the reference implementation in this CIP, I get different numbers from the ones in the table. See celestiaorg/celestia-app#4299
There was a problem hiding this comment.
Note: if we adopt current reference implementation then the observed inflation in year 1 will be a time-weighted average of the previous inflation (7.2%) and the adjusted inflation (4.82%).
For more context: this proposal will only impact block provisions for blocks produced on celestia-app v4. The v3 blocks in year 1 are currently emitting block provisions using the previous inflation (7.2%).
We should get clarity on the desired year 1 inflation:
- Original inflation (7.2%)
- Adjusted inflation (4.82%)
- Time-weighted average of the two. Assuming 6 months on v3 and 6 months on v4 then 6.01%
Options 1 and 2 imply more changes that aren't in the reference implementation.
|
hey @tac0turtle can you please provide clarity on @rootulp's comment above? |
rootulp
left a comment
rootulp
left a comment
There was a problem hiding this comment.
I spot checked the calculation inflation numbers in the updated schedule and they seem correct. See https://github.com/celestiaorg/celestia-app/pull/4299/files#diff-59d4062609e837d218c1ca5b58fc7cf22419c204c245e606f77502a6aff36381R90-R110
Note the image may need to be updated.
Co-authored-by: Rootul P <rootulp@gmail.com>
Co-authored-by: Rootul P <rootulp@gmail.com>
Co-authored-by: Rootul P <rootulp@gmail.com>
Co-authored-by: Ismail Khoffi <Ismail.Khoffi@gmail.com>
|
LGTM after image is updated |
5 participants
Overview
This CIP is focused around dropping this years inflation by 33% and reducing the disinflation by 33%. We propose this change be applied in the next upgrade (v4)