[Draft] Inflation Adjustment Proposal

Technical Proposals šŸ“ƒ
1

Summary

This proposal suggests setting inflation of $OPā€™s total token supply to 0%. The total supply will remain at 4,294,967,296 OP.

Motivation

Data gathered from: [PUBLIC] OP Token Unlock (Estimated) - Google Sheetsand OP Allocations | Optimism Docs.

As FY3 (May 2024 to April 2025) concludes, evaluating $OP token dynamics within the broader context of token supply management is crucial. While the early years saw relatively low circulation (approximately 8% at the start of FY1), FY2 experienced a steep increase of up to 270% in circulating supply. The forecast suggests a stabilisation around 50% by May 2026.

Specific allocations such as the Partner Fund and Seed Fund remain significantly underutilised. As of April 2025, the Partner Fund has committed approximately 90 million OPā€” less than 20% of its total allocationā€”and distributed around 5.7%. The Seed Fund has distributed only 4.8% of its allocation. These figures suggest that substantial reserves are still available to fund ecosystem needs without additional inflation.

Given this underutilisation and the consistent unlock schedule, further minting is unnecessary.

As of 28. April 2025,

  • Approximately 58.4%% of the total OP supply has been formally committed.
  • Projected circulating supply for FY4 (May 2025 to April 2026) is not expected to exceed 57.2%.

Considering the amount of unallocated tokens and the increase in OP supply for FY-4, the governance should consider setting the inflation to 0%.

Specification

This proposal would set an inflation rate for [May 2025 - April 2026] of [0%].

If approved, and if not superceeded by another Inflation Adjustment Proposal with higher approval, this proposal will result in a one-time mint of OP of [0]% of the current total supply (4,294,967,296 OP) equal to [0] tokens. This inflation will occur on or shortly after May 31 and accrues to the ā€œunallocatedā€ portion of the token supply.

If not approved, and unless another Inflation Adjustment Proposal is approved, inflation will remain at the rate last approved by governance, which was 0%. Inflation will occur on or shortly after May 31 and accrues to the ā€œunallocatedā€ portion of the token supply.

Impact Summary

No new tokens will be minted, effectively allocating the current supply of OP tokens. Considering the super chainā€™s growth, Chain delegation, and grants, new tokens can be minted once all the unallocated token supply for future growth programmes is fully utilised.

  • Maintains the current total token supply
  • Prioritizes the use of existing unallocated OP tokens
  • Sends a clear signal of financial responsibility to stakeholders and contributors
  • Positions the ecosystem for sustainable growth by focusing on capital efficiency
  • Ensures future inflationary tools are only used after exhausting existing reserves
3 Likes
2

Wondering if this proposal is needed since the Inflation Adjustment Proposal Template indicates the following:

Could someone clarify?
@lavande @maxwell

1 Like
3

As far as we can tell, the inflation rate is already at 0%. So this proposal wonā€™t accomplish anything.

4

This is an optional proposal that can be, but is not required to be, put forward during the voting cycle that ends closest to May 31st. If governance does not believe any adjustments need to be made, no proposal will be put forward, there wonā€™t be a vote, and inflation will remain at 0% for another year.

1 Like