[PIP-5] Monetary Policy: Capped Inflation Schedule

Voting ended over 5 years agoSucceeded

A proposal by the Pickle Core Devs

See this Google Doc for better formatting + charts.

Motivation

The community is concerned with the current monetary policy and the risks that it poses to the PICKLE ecosystem due to constant PICKLE emission leading to a high rate of annualized inflation.

The weekly halving schedule takes us to the end of Week 4, but does not specify any nuanced mechanisms beyond that. As a result, the Core Devs would like to propose an emission schedule beyond Week 4 to keep inflation in check.

Design Principles

These are the key points considered in the authoring of this proposal:

To clamp down on annual inflation
To maintain a PICKLE emission for farming to continue to exist
To prevent systemic shocks by using smooth emission changes

The proposed design was strongly influenced by SIP-23 and SIP-24 of the Synthetix community. Read their blog post for more details on how those proposals were constructed.

Current Emission Schedule

For context, the current PICKLE emission schedule dictates a weekly halving for the first four weeks, with a subsequent 1 PICKLE per block to be minted thereafter.

Proposed Emission Schedule

The proposed schedule will feature a gradual decrease in PICKLE minting up until the end of the first year, after which a static amount will be minted in perpetuity.

Starting from Week 6 and ending at the end of Week 52, the number of PICKLEs minted will decline each week by 10% from the previous week.

After Week 52, PICKLEs minted will remain static each week (at approx. 329 PICKLEs per week), capping the overall annualized inflation rate at 1.29% and further decreasing over time.

Off-Chain Vote

Implement the proposed emission schedule in PIP-5

377.12 99.6%

Do Nothing

1.46 0.4%

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Timeline

Sep 17, 2020Proposal created

Sep 17, 2020Proposal vote started

Sep 18, 2020Proposal vote ended

Jan 23, 2024Proposal updated

Motivation

The community is concerned with the current monetary policy and the risks that it poses to the PICKLE ecosystem due to constant PICKLE emission leading to a high rate of annualized inflation.

Design Principles

These are the key points considered in the authoring of this proposal:

To clamp down on annual inflation

To maintain a PICKLE emission for farming to continue to exist

To prevent systemic shocks by using smooth emission changes

The proposed design was strongly influenced by SIP-23 and SIP-24 of the Synthetix community. Read their blog post for more details on how those proposals were constructed.

Proposed Emission Schedule

The proposed schedule will feature a gradual decrease in PICKLE minting up until the end of the first year, after which a static amount will be minted in perpetuity.

Starting from Week 6 and ending at the end of Week 52, the number of PICKLEs minted will decline each week by 10% from the previous week.

After Week 52, PICKLEs minted will remain static each week (at approx. 329 PICKLEs per week), capping the overall annualized inflation rate at 1.29% and further decreasing over time.