TIP: 0018
Title: Frontload TLOS inflation schedule
Authors: Amplified Telos (Ian Panchèvre / [email protected])
Status: Declined
Type: Protocol
Created: 2018–10–08
The current inflation schedule of 2.5% a year may not generate enough capital to sufficiently finance the Worker Proposal Fund (WPF) and the block producers. TIP 18 proposes frontloading the TLOS inflation schedule.
The value of annual inflation must be sufficient to pay for critical projects (as sourced through the Worker Proposal System) as well as cover the operations of at least 51 block producers. By increasing the inflation rates during the early years of network operations, Telos stakeholders will be more likely to be sufficiently capitalized.
As currently structured, daily pay rates for block producers are likely insufficient to cover operations. We must design Telos’ token economy in such a way that it may persevere through a protracted bear cycle. If Telos achieves the rank of #30 on coinmarketcap.com (and is valued similarly to Decred and Qtum), then the value of an individual TLOS will be approximately $1. According to the current block producer pay rate (annual inflation of 1% shared among 51 active and standby BPs), then active BPs will earn $252 a day and standby BPs will earn $126 a day. At these rates, many BPs will struggle to sustain operations and raise outside capital.
Additionally, given that Telos will compete for market share against very well financed smart contract platforms, an annual inflation of 1.5% allocated to the WPF is also unlikely to generate sufficient capital. Again, assuming that TLOS trades at $1, then approximately $4,976,227 worth of TLOS will reach the WPF during the first year. Many smart contract platforms have hundreds of millions or even billions of dollars in operating capital; Telos needs more fire power.
Modify language in the Telos Blockchain Network Operating Agreement (TBNOA) so that the annual inflation percentage is scheduled accordingly:
| YEAR | WPF | BP | Annual Inflation |
|---|---|---|---|
| 1 | 2.5 | 2.5 | 5.0 |
| 2 | 2.25 | 2.25 | 4.5 |
| 3 | 2.0 | 2.0 | 4.0 |
| 4 | 1.75 | 1.75 | 3.5 |
| 5 | 1.5 | 1.5 | 3.0 |
| 6 | 1.5 | 1.25 | 2.75 |
| 7 | 1.5 | 1 | 2.5 |
| 8 | 1.5 | 1 | 2.5 |
(Discussion period is closed.) Voted by Telos Contributors Group 2018-10-23. Voting: Yes - 0, No - 30, Abstain - 0
This document is in the public domain.