# \[Final\] Inflation Adjustment Proposal (to 0%) **URL:** \ **Category:** Technical Proposals\ **Created:** [April 29, 2023, 11:11am UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936 "2023-04-29T11:11:46Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![polynya](https://avatars.discourse-cdn.com/v4/letter/p/8baadc/32.png) [@polynya](https://gov.optimism.io/u/polynya)\ **Post date:** [April 29, 2023, 11:11am UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/1 "2023-04-29T11:11:46Z")
### **Summary** This proposal will signal to set inflation of $OP’s total token supply to **0%**. The total supply will remain at _ **4,294,967,296 OP** _. ### **Motivation** As we near the end of $OP’s first financial year, a total of only ~8% of total supply is expected to be circulating. For FY 2, May 2023 - April 2024, we are expected to see 270% inflation in circulating supply, falling to roughly ~50% till May 2026. Particularly in the Partner Fund + Seed Fund + Unallocated category, less than 5% was circulating as of February 2023. In light of arguably an overabundance of $OP supply available over the next 3 years, the 2% inflation of $OP is unnecessary. As an aside, this is thus more of a symbolic proposal (Edit: just to clarify, it’s “symbolic” in the sense that reducing 2% when circulating supply inflation is 50%-270% is negligible - this is very much a real proposal), and I hope to see more investigation to improve $OP’s tokenomics, as far as possible. I have discussed this matter before multiple times, [including recently](https://gov.optimism.io/t/polynya-delegate-communication-thread/3085/19) - we can do better with a more data-driven approach to token distribution. Data gathered from: [[PUBLIC] OP Token Unlock (Estimated) - Google Sheets](https://docs.google.com/spreadsheets/d/1qVMhLmmch3s6XSbiBe8hgD4ntMkPIOhc1WrhsYsQc7M/edit#gid=1283480580) (updated requested) and [OP Allocations | Optimism Docs](https://community.optimism.io/docs/governance/allocations/). ### **Specification** _This proposal would set an inflation rate for [**May 2023 - April 2024**] of [**0%**]._ _If approved, and if not superseded by another Inflation Adjustment Proposal with higher approval, this proposal will result in a one-time mint of OP of [**0**]% of the current total supply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 “unallocated” portion of the token treasury._ _If not approved, and unless another Inflation Adjustment Proposal is approved, inflation will remain at **2%** , which will result in a one-time minting of 2% of the current total supply, or 85,899,345 OP. Inflation will occur on or shortly after May 31 and accrues to the “unallocated” portion of the token treasury._ ### **Impact Summary** This proposal will have no impact until most of the Unallocated tokens are circulating, or we need additional long-term funding for any of the other categories - all of which have plenty of tokens available over the next 3 years. We will revisit the topic next year just in case the Ecosystem Fund has been utilized greater than projections. ---
**Author:** ![cryptoAYA](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/cryptoaya/32/5125_2.png) [@cryptoAYA](https://gov.optimism.io/u/cryptoAYA)\ **Post date:** [April 29, 2023, 5:42pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/2 "2023-04-29T17:42:55Z")
Greetings, Thanks for this post. The links are so interesting to read about. ---
**Author:** ![itsdeath](https://avatars.discourse-cdn.com/v4/letter/i/8dc957/32.png) [@itsdeath](https://gov.optimism.io/u/itsdeath)\ **Post date:** [April 29, 2023, 10:10pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/3 "2023-04-29T22:10:44Z")
Thanks a lot for this draft, I will be 100% supporting it. I want to first start by saying that I love Optimism, been a holder since the mainnet launch, been watching every video about cannon, bedrock, superchain… Hands down OP has the worst tokenomics I have ever seen in any project since the beginning of my crypto journey in 2018. Imagine loving a project so much and wanting to hold it just to get crushed with 150mil OP released in 1 day, and knowing that 800 more mil will be unlocked by mid 2024. In the official discord there is barely any OP token discussion and if you check the channel its all “HI HEY HI GM HELLO HI HEY HI” by bots and any legitimate question is asked is answered with “We don’t know anything about the tokenomics here are some links that won’t make any sense, and keep in mind that these tokenomics charts aren’t accurate at all! but just know that if there is any upcoming unlocking’s they will be announced ahead of time” In my opinion the tokenomics need to be redone, and massive unlockings shouldn’t occur in a single day but rather linearly over the year + setting the inflation down to 0%. Really doubt anyone will read this or will care and this comment will just end up like any of the concerned messages people sent over in the discord. ---
**Author:** ![norswap](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/norswap/32/632_2.png) [@norswap](https://gov.optimism.io/u/norswap)\ **Post date:** [May 1, 2023, 10:20am UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/4 "2023-05-01T10:20:48Z")
Absolutely agree. OP inflation is necessary long-term, but unnecessary right now given the large supply overhang. ---
**Author:** ![Graciouseats](https://avatars.discourse-cdn.com/v4/letter/g/d6d6ee/32.png) [@Graciouseats](https://gov.optimism.io/u/Graciouseats)\ **Post date:** [May 2, 2023, 9:37pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/6 "2023-05-02T21:37:26Z")
Interesting and it makes sense. Would like to hear why it shouldn’t be done. ---
**Author:** ![jackanorak](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/jackanorak/32/1633_2.png) [@jackanorak](https://gov.optimism.io/u/jackanorak)\ **Post date:** [May 4, 2023, 4:22pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/7 "2023-05-04T16:22:06Z")
Co-sign. think this sends a strong message. I am an Optimism [delegate](https://gov.optimism.io/t/delegate-commitments/235/136) with [sufficient voting power](https://vote.optimism.io/delegate/jackanorak.eth), and I believe this proposal is ready to move to a vote ---
**Author:** ![jengajojo](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/jengajojo/32/8397_2.png) [@jengajojo](https://gov.optimism.io/u/jengajojo)\ **Post date:** [May 5, 2023, 12:00pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/8 "2023-05-05T12:00:38Z")
Definitely in favor! ---
**Author:** ![mastermojo](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/mastermojo/32/1178_2.png) [@mastermojo](https://gov.optimism.io/u/mastermojo)\ **Post date:** [May 5, 2023, 2:23pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/9 "2023-05-05T14:23:15Z")
I am an Optimism [delegate](https://gov.optimism.io/t/delegate-commitments/235/65?) with sufficient voting power, and I believe this proposal is ready to move to a vote! We feel there is no current need for the inflation. We can revisit this in the future, and turn it back on if governance sees it necessary. ---
**Author:** ![gunboats](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/gunboats/32/2049_2.png) [@gunboats](https://gov.optimism.io/u/gunboats)\ **Post date:** [May 5, 2023, 2:33pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/10 "2023-05-05T14:33:34Z")
There is no need to print more when the fund still has OP to gives out. The question of improving OP’s tokenomics is nice but perhaps it should be after fraud proof deployment. ---
**Author:** ![polynya](https://avatars.discourse-cdn.com/v4/letter/p/8baadc/32.png) [@polynya](https://gov.optimism.io/u/polynya)\ **Post date:** [May 7, 2023, 6:42am UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/11 "2023-05-07T06:42:37Z")
> [@gunboats](#): > > There is no need to print more when the fund still has OP to gives out. > > The question of improving OP’s tokenomics is nice but perhaps it should be after fraud proof deployment. I fully agree technical decentralization should be the #1 focus, however this proposal is mutually exclusive from achieving that goal. Intent #1 in the next season is all about technical decentralization, and a security council and fraud proofs should be top of that list. ---
**Author:** ![bobby](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/bobby/32/71_2.png) [@bobby](https://gov.optimism.io/u/bobby)\ **Post date:** [May 9, 2023, 9:32pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/12 "2023-05-09T21:32:50Z")
Hey Polynya, thanks for creating the first ever proposal of this type 🙏 **I work at the Optimism Foundation, but these are my personal views, not the views of the Foundation.** I strongly agree that the Collective doesn’t need inflation of the OP token right now. It’s important that we’re able to increase circulating supply of OP while managing risk to Token House governance, and increasing the total number of tokens in existence moves us further away from this goal. It’s possible inflation is a useful growth lever in future years, but it doesn’t help right now. Setting inflation to 0% this year will allow the community to focus on distribution of existing OP tokens to further the Collective’s [core intents](https://gov.optimism.io/t/collective-intents/5874). ---
**Author:** ![fig](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/fig/32/390_2.png) [@fig](https://gov.optimism.io/u/fig)\ **Post date:** [May 10, 2023, 7:21pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/13 "2023-05-10T19:21:47Z")
This has become a bit hidden on the forum due to the volume of comments and proposals. We believe token economies are an important aspect of ownership within a protocol. Signaling to the community a desire to reduce inflation in the token supply seems like a worthwhile topic; looks like most comments above are generally supportive of this initiative. Noted by @bobby, it allows for more focus on key objectives without diluting ownership. * * * Flipside Crypto is a [delegate](https://gov.optimism.io/t/delegate-commitments/235/69) with [sufficient voting power](https://op-governance.vercel.app/) and believes this is something the community may vote on; we believe this proposal is ready to move to a vote in Special Voting Cycle #12b ---
**Author:** ![TheDoctor](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/thedoctor/32/1736_2.png) [@TheDoctor](https://gov.optimism.io/u/TheDoctor)\ **Post date:** [May 11, 2023, 10:44pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/14 "2023-05-11T22:44:58Z")
I am worried about this sending the wrong message. I get your point, and I know you get that the main concern must be sustainability. I don’t believe inflation is bad as most people do, what is bad is to use it badly as governants do. A good decentralized governance would use it as the tool it is. ---
**Author:** ![linda](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/linda/32/187_2.png) [@linda](https://gov.optimism.io/u/linda)\ **Post date:** [May 15, 2023, 6:52pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/15 "2023-05-15T18:52:54Z")
I think the reasoning you laid out here makes a lot of sense. I am an Optimism delegate [[Delegate Commitments - #37 by linda](https://gov.optimism.io/t/delegate-commitments/235/37)] with sufficient voting power and I believe this proposal is ready to move to a vote. ---
**Author:** ![olimpio](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/olimpio/32/920_2.png) [@olimpio](https://gov.optimism.io/u/olimpio)\ **Post date:** [May 15, 2023, 9:55pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/16 "2023-05-15T21:55:16Z")
I believe this is a good idea, especially considering the context laid out (current and future circulating supply), and the fact that the topic can/will be revisited in the future and modified again if need be. I am an [Optimism delegate](https://gov.optimism.io/t/delegate-commitments/235/76) with sufficient voting power and I believe this proposal is ready to move to a vote. ---
**Author:** ![polynya](https://avatars.discourse-cdn.com/v4/letter/p/8baadc/32.png) [@polynya](https://gov.optimism.io/u/polynya)\ **Post date:** [May 16, 2023, 12:22pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/17 "2023-05-16T12:22:55Z")
As there are now 4 or more delegates with sufficient voting power approving this proposal, it’s now ready to move to a vote, and I’ve updated the title to [Final] ---
**Author:** ![lionmountain](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/lionmountain/32/4166_2.png) [@lionmountain](https://gov.optimism.io/u/lionmountain)\ **Post date:** [May 17, 2023, 6:06am UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/18 "2023-05-17T06:06:49Z")
I fully agree and support the proposal. The huge unlock is a problem for the price development of the op token. ---
**Author:** ![alibama](https://avatars.discourse-cdn.com/v4/letter/a/aeb1de/32.png) [@alibama](https://gov.optimism.io/u/alibama)\ **Post date:** [May 17, 2023, 11:03pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/19 "2023-05-17T23:03:34Z")
i’m def not an economist, and would really like to understand the proposal better and wonder if there’s a process like [machinations.io](http://machinations.io) or other products that could help visualize this process? ---
**Author:** ![lee0007](https://avatars.discourse-cdn.com/v4/letter/l/9fc348/32.png) [@lee0007](https://gov.optimism.io/u/lee0007)\ **Post date:** [May 17, 2023, 11:59pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/20 "2023-05-17T23:59:41Z")
I am a major fan of Daniel Kahneman’s [Thinking Fast and Slow](https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow). To my fast brain - even though I do not know why OP inflation exists - lower inflation ‘intuitively’ appeals. However, my slow-thinking brain was reminded today (by delegate teammate @pat.zip) of the token engineering ethical responsibility and disciplinary rigour for designing crypto-economic systems. ![Vaughan Tan](https://europe1.discourse-cdn.com/bc41dd/original/2X/8/8da11b6680611159b489f2f9297c32ba2b038bbf.png) Image [source: Vaughan Tan](https://uncertaintymindset.substack.com/p/overloading-appropriation) It seems to me that this proposal falls into an [uncertainty vs quantifiable formal risk](https://vaughntan.org/how-to-think-more-clearly-about-risk) catergory, in that we could fully specify, simulate, test and validate outcomes, but can we know all possible outcomes? I feel its worth testing and validating as many outcomes as possible… I am uncertain from this proposal what impact the change of inflation may have on a complex system and hope to see as @alibama [mentions](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/19) investment (time & funding) in further analysis > **[cadCAD – A Python package for designing, testing and validating complex...](https://cadcad.org/)** > > At its core, cadCAD is a differential games engine that supports parameter sweeping and Monte Carlo analyses and can be easily integrated with other scientific computing Python modules and data science workflows. ---
**Author:** ![Griff](https://dub1.discourse-cdn.com/bc41dd/user_avatar/gov.optimism.io/griff/32/9241_2.png) [@Griff](https://gov.optimism.io/u/Griff)\ **Post date:** [May 18, 2023, 8:59pm UTC](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936/21 "2023-05-18T20:59:48Z")
I agree, the inflation is not necessary at this stage, the fact that it is there as an option for later is a good thing, so I agree, lets set it to 0, for now, and leave it open in the future to put it back if needed. [Next page](https://gov.optimism.io/t/final-inflation-adjustment-proposal-to-0/5936.md?page=2)