There are 2 ways of dealing with inflation, knowing that terra is not being minted:
-Produce more: means more fees (volume) so we release less Terra than we manage to buy&burn through Treasury. This is deflation so it fights inflation directly cancelating it mathematically.
This form implies also the possibility to bring new investors as new money getting in our ecosystem and buying more Terra than the one being released, and maybe staking it or swapping etc, will help too. So, be more productive or more capital coming on board (or both).
-lowering the rates to release slower than it’s burned by treasury, launchapds or banners, and take more terra out of circulation with new longer term pools with rational rates.
What do you guys think about lowering the rates to deal with inflation? Adjusting staking to new rates in new longer term pools. I,ve been thinking about it and my
proposition is to open new staking pools of:
180 days - 16%
90 days - 13%
60 days - 9%
14 days - 5% or about that.
Make the current 14 days “sold out”.
This will slow down inflation and mitigate price dropping bcause of it, and probably the burning will mean proportionally more than now every week.
I don’t know how much terra is released monthly by now but this would definitely help to close the gap.
Another tool to control inflation is to have fixed max amount per pool. For example, 10M max Terra staking for the 180 days at 16% will make it more appealing (scarcity of the product) and will provide an exact easy to calculate amount of Terra being released. So we can know that max Terra to be released will be 1.6M from that specific pool, along the 180 days term. This way we can even develop campaigns to mitigate it, as launchpool burning like Sele, meme competition aimed to enhance volume, etc. If we manage to burn 1.6 Millions in 180 days we’d have destroyed inflation coming from that pool.
The same for all new pools, as we wait for the 1 and 2 year pools to end. Then we will have to calibrate again, after evaluating how it’s going.
If people have to restake every day or week or 14 days, tend to concern more about short term price action because they get more terra available in shorter times. If they can stake for longer terms they can relax and show trust to the project.
If we don’t think about this and take action, we’re depending on lunc value alone.
I think it’s important calibrate this rates. My proposed values are not taxative, but would be cool if the 180 days is the 16% one and the highest available. Then all the rest of shorter terms with smaller rates accordingly.