Please make sure to review Gav's reply to the latest wish-for-change that tackled inflation. There should be enough time for discussion and feedback for such an important topic, We wouldn't like to rush in 30 days such an important decision.

https://polkadot.polkassembly.io/referenda/851#Oo28tEmzKyoCWJNce8yg

Here's the current discussion, it should be preferable that an inflation changing wish for change and posterior implementation was discussed on the forums first so that members of the fellowship devs and community can review the changes. Here's the current discussion. https://forum.polkadot.network/t/proposal-for-adjusting-polkadots-inflation-system-reducing-issuance-and-complexity/9157

Thank you @saxemberg I will dive into those links, and get back to you as there is quite a bit to go through.

@saxemberg I have responded in the Forum.

I would like to invite @gav to comment, as from what I can see, this WFC does not impede on cap supply but only addresses inflation and ecosystem alignment every 4 years while adding a strong narrative to our ecosystem.

I have read through the messages from the "Proposal for Adjusting Polkadot’s Inflation System: Reducing Issuance and Complexity" and have posted my 2 cents.

I have decided to also post them here as they add value to this WFC please read bellow:

I will try to keep this concise. To me, the goal of this discussion is in the title: "Reducing Issuance and Complexity," and coretime, governance, and treasury spending should be kept out of this discussion.

I believe it is all quite simple; we default to a proven and well-known model, that being BTC and the BTC halving mechanism.

Why: While "mums and dads" might not know what crypto, altcoins, or blockchain is, they all know what Bitcoin is. As Web3 is adopted by mums and dads, it will be easier if our inflation model is similar and relatable to BTC.

The US has already started to bring up BTC in politics for being a sound and resilient digital currency. We do not need to reinvent the wheel; in fact, there would be much synergy if we had a similar narrative to BTC. Polkadot already has a high Nakamoto Coefficient, and we are secure and scalable. However, our token metrics are not sound. We have regulatory clarity as software, and there is no reason why our "software" can't be a hedge against an inflating USD. As this discussion has covered, we don't know what the future holds with core time sales and JAM. However, I agree we should not have a fixed supply at this stage.

I do believe that we should align our inflation narrative with BTC and act sooner rather than later on this so that our supply halving happens in sync with BTC's halving, allowing us to catch the halving wave after BTC's halving. Such a narrative will spark the interest of long-term investors, knowing that now is the time to stake and get in early while the APY is high.

These four-year terms are also comparable to the US elections, making it more relatable for newcomers, and there will be synergies there for OpenGov to explore.

In closing, I decided to post this WFC as there is a huge growing discontent within the community on X.com.

Screenshot 2024-08-06 at 12.04.33

I have made this chart for a quick visual on how this will look for the next 4 cycles:

Polkadot is upgradable, and if there is any discontent, we can make adjustments. However, I do believe that this will greatly strengthen our narrative and help restore confidence in our ecosystem.

I support the idea, let's make the asset deflationary, even ethereum tried to switch to this model. At the very least, we need to significantly eradicate this inflation

We should have this conversation after Agile Coretime, not before. There are ramifications for doing so: https://x.com/0xgoku_/status/1819345584693617121?s=46&t=8OHoQS5WYvVJ6O_n5G4B0g

As we saw with DED, if you take away something that people are expecting to get it can elicit a very intense negative response. This phenomenon is known as deprival super reaction syndrome and it is a very strong, irrational response. It is likely the case that a large number of tokens are held by owners that don't vote in governance (or Twitter polls). If we take away those investors staking rewards, that they are expecting to get, then they probably will get very annoyed, stop buying if they are, and some of them will sell.

From the perspective a new investor, the high yield of Polkadot is attractive because it compensates them for the risk of holding what the market perceives as a lower quality asset. If Polkadot staking reward is brought close to the level of Ethereum, the rational choice for an investor would be to buy the Eth because Eth is perceived as higher quality and lower risk.

It is the predictability of Bitcoin emission that makes it attractive, not the 50% reduction per se. This proposal is just an attempt to drive the price of do by attracting speculators with a silly narrative that actually demonstrates the unpredictability of Polkadot emission while punishing investors who have held and participated in staking. It is just as likely that a policy of reducing inflation in this way will be perceived as desperate actions by a failing project.

This policy change is more likely to cause harm than it is likely to cause "long-term positive speculation."

Any proposal to reduce or halve inflation would be rejected because it would affect the official withdrawal of cash from the Treasury

$DOT is going to zero

Although I am in favor of a reduction in inflation at Polkadot, I find this type of proposal problematic.

These proposals, such as the one that proposed to put a hardcap on Polkadot without taking into account the projections made by Gavin Wood, are not planned or discussed enough to be launched, so end up being rejected.

However, these rejections generate problems since, externally, it is believed that Polkadot does not want to reduce inflation or put a limit on the production of tokens, when no, WHAT WE DO NOT WANT ARE UNBASED PROPOSALS.

Already from the Fellowship we are working on the Pallet Inflation, which will allow the community to decide directly by vote the inflation of the protocol. We are having discussions in the Forum for this.

Many Polkadot developers are working hard to find the best way to manage inflation. However, poorly planned and rushed proposals only generate divisions, bad external perceptions and delay the progress that the ecosystem can make at this point. It is essential that we work together to find consensual, long-term solutions.