As the proposal is now on chain, we have done some more research to understand the implications of the proposal and are sharing it here so that others can make an informed decision on their votes. Please correct anything we have wrong.
Inflation rate change
This variable has been discussed at length for the Cosmos Hub as part of Proposal 48 which passed a couple of weeks ago. The needs of the Cosmos Hub are different from Akash as they are sitting on the minimum inflation and are trying to protect against mass unstaking events by having the inflation rise, whereas Akash will be at the maximum inflation and would like it to gradually reduce (to help follow the intended curve in the whitepaper).
For those interested in learning more about the effect of the ‘inflation rate change’ variable on the inflation curve, you can check out the Cosmos Hub discussion here: Paramater Change Proposal: Inflation Rate Change - #8 by zaki_iqlusion - Governance - Cosmos Forum
In simple terms however, setting it to 100% just makes the inflation drop faster than it has been previously.
Inflation on Akash is currently ~47.73%. As this is 47.73% of all AKT, but only staked AKT receive the the reward, this means that APY is currently 47.73%/84.34% (staked ratio) = 56.59%.
If this proposal is successful, the max inflation will become 40% so there will be a step change of inflation from the current value of ~47.73% straight down to 40%. Assuming staked ratio doesn’t change, this means that APY will become 40%/84.34% = 47.43%. With compounding still resulting in a higher return.
Note: Akash network has a target staked ratio of 67% (e.g. we want at least 67% of all AKT to be staked) which means that if staked percentage is above that (as it is now at 84%) the inflation will try to be at the minimum inflation level (there is no need to give extra incentives for people to stake as we are already above the target). But as we will be sitting at the max inflation, the network will try to get down to the minimum as quickly as possible (depending on inflation rate change we discussed above).
@chenghiskhan How long will it take inflation to reach the Inflation Min of 25% assuming your choice of 100% inflation rate change and also assuming that the staked rate stays above 67%?
Although we’ve answered some of our own questions from the above post, it would be good to get a comment on the others.
Sorry if this detail is already posted somewhere but we weren’t able to find it.
Bliss Dynamics supports the proposal but reserves our vote until we hear more info on the tuning that has gone into the variables.