Restore XPRT Inflation to Strengthen Staking & Security**

[Cosmick777]

I would like at this point to ask the community member Pawel_PK that put forward the Forum post “XPRT inflation reduction - change the minimum inflation parameter to 6,25” back in April 2024 to come forward and give his/her thoughts on this forum post. After all it was his/her idea to do this reduction, I would be very interested as to what he/she has to say about the effect that has happened from the reduction and if he/she still thinks it was a good idea to bring forward the halving?

@Pawel_PK

High Inflation negatively affects the overall economic health of the ecosystem (excessive token supply and devaluation). While it encourages long term project supporters to hold and stake, it disencourages liquidity provision which is much needed for a healthy ecosystem. The current proposal aims to ensure long term health and sustainability of Persistence by slowly making further trade-offs between economic security and liquidity. Trading economic security for liquidity is facilitated by having stkXPRT (economic security & liquidity together) and Babylon BTC security (alternative source of security).

@Pawel_PK

Note that the minimum inflation parameter change will happen in ~a year, even if this proposal will not pass. Inflation halving was built in from genesis, and this proposal aims to bring the next halving forward. Considering latest developments and staking ratio/security/liquidity situation it is deemed to be beneficial to the ecosystem and holders to speed it up.

@Pawel_PK

Persistence is planning to integrate with Babylon for BTC security, so the need for high inflation to pay for security is reduced. The split of staking rewards between XPRT and BTC stakers will balance the security needs without relying heavily on inflation. This will of course need further research, discussions, and proposals.

I agree with what Pawel_PK says here but it was way to early to do this as seen by the mass undelegations that has happened weakening the security of the network. If the reduction was kept as it was we would be in mainnet and probably linked with babylon before this reduction kicked in as originally planned.

I find it hard to imagine that Pawel_PK has not made a comment on this post and I would like to hear from him/her.

This is why it should be restored now, then we should wait until after the mainnet launch and linking with Babylon before we visit this type of idea again.