[Final] Inflation Adjustment Proposal (to 0%)

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.

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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.

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Hey Polynya, thanks for creating the first ever proposal of this type :pray:

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.

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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 with sufficient voting power 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

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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.

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I think the reasoning you laid out here makes a lot of sense.

I am an Optimism delegate [Delegate Commitments - #37 by linda] with sufficient voting power and I believe this proposal is ready to move to a vote.

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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 with sufficient voting power and I believe this proposal is ready to move to a vote.

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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]

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I fully agree and support the proposal. The huge unlock is a problem for the price development of the op token.

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 or other products that could help visualize this process?

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I am a major fan of Daniel Kahneman’s 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.

Image source: Vaughan Tan

It seems to me that this proposal falls into an uncertainty vs quantifiable formal 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 investment (time & funding) in further analysis

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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.

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Greeting,

This is agreat proposal. In regards to inflation, it can not be said that its totally has negative impact on the OP tokens. But to give aprecise speculations, the token house memebers who have a profound knowedleg about the economy should come and talk.

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While I don’t have much voting power, I am an Optimism delegate.

I support this proposal. As of today, ~55% of OP’s total supply is outstanding to be distributed to the community through the Ecosystem Fund, RetroPGF funding, and future airdrops. That’s a lot. The 2% inflation has yet to begin, but I don’t see why it should with that much funding still available to incentivize the development and usage of Optimism.

The inflation rate can be revisited in the future and modified again once there is a need for it and an area where the emissions will be directed is specified.

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Totally in support of this proposal. Inflating the $OP supply doesn’t seem necessary at this point. There should be enough $OP (not circulating yet) to meet short to medium term needs.

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Great news if inflation hits 0%. I will keep the coins for a long time.

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After reviewing, we’ve decided to cast our vote in support of this proposal. With the considerable supply overhang of $OP, we also believe that the Collective doesn’t require additional inflation of the OP token right now. Increasing the total supply of tokens will moving us further from our goal of managing and increasing the circulating supply of OP. While inflation can serve as a useful growth lever in the future, it seems less beneficial in our current situation. Setting the inflation to 0% for this year will allow us to focus on strategically distributing the existing OP tokens.

Sharing OP 2022-2023 budget w/ current allocations from Treasury Appropriation Proposal: Foundation Year 2 Budget for better visualization of current OP distributions.

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I am voting in support of this proposal. As others have stated there is going to be various unlocks and increases in supply in the coming year. So setting inflation to zero for this year makes absolute sense.

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Since there is an OP token overhang, which can be seen by comparing the overall token amount and the circulating supply, we think it would be the right move to not increase the overall token amount.

We believe the amount of the overall OP tokens are sufficient for the goal of increasing the circulating supply. Besides, with the overall amount the main focus can be on the token allocation and the Token House, therefore we vote “for” on this proposal.

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it would be great if inflation reduces to zero.
this way it would be good for holders and stability of token price

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