Feedback Request: a new complementary maximal bound issuance for the Quebec protocol proposal

Research and Development
86

Let me contrast the key points from your article:

  1. Long-term impacts of lower issuance: Quebec A/B proposals aim to reduce Tezos issuance, but the impact on price won’t be immediate and could take months or longer to materialize.

Sustainable impact on price is desirable, so mid and long term is ok and nobody said the contrary.

  1. Misleading campaigns: Current campaigns to attract stakers focus on high APY without clear communication about the significant drops in returns that will occur when the Quebec proposals are activated.

Quebec will not provoke any drop in returns, it merely caps the maximum issuance according to a curve in function of the % of staking on the network.

  1. Responsibility of bakers: Bakers hold the responsibility to communicate the real impact of these proposals to their delegators and stakers, ensuring transparency and trust.

Bakers may have a responsibility to communicate, but not to promote the narrative you want them to.

  1. Potential backlash: If stakers feel misled, they may withdraw from staking and the network, creating sell pressure and further price declines.

This is an unfounded hypothesis. There is no evidence that this would happen.

  1. Educating stakers: It is crucial for bakers to inform their stakers about upcoming changes to avoid trust issues and long-term damage to the ecosystem.

Education is not propaganda. The best way to educate is providing data from sources like tzkt.io or tzstats.com and let people do their own research.

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87

Since BFT requires 2/3 consensus, why is the staking target 50% instead of 66%? Makes sense that if you need 2/3 for BFT security, you should need 2/3 locked for max security…

If we hit 50% target and price still hasn’t moved, stakers may want to sell a non-yielding asset with no price action. It seems a target of 67% would be the safest overall for the health chain.

It is possible to hit the 50% target without price moving because all delegators could simply turn into stakers and it would not affect the price.

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88

You don’t need to have 66% for security just for no one else to be able to acquire 66%. Keeping in mind that amount would likely be slashed.

I would argue that increasing the amount at stake is proving to be more difficult than anticipated is a better measure of security than any number you might pick.

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89

it’s mean that Everstake will support Qena?

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91

Following that comment, the adaptive maximum curve was adjusted by Nomadic Labs to allow for increased issuance, so I suspect Everstake is now inclined towards Quebec

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92

Hi, @TezoSpanish,

It’s unfortunate to see how my post has been misconstrued. My intention was simply to raise awareness and encourage you and others, should you choose Quebec, to inform your stakers and delegators. That was all.

To address your points:

  1. I will not discuss point 1, as we have already agreed on it.
  2. Regarding point 2, it will actually lead to a drop in returns. You can verify this by reviewing the current curve at https://ai.xtzchad.xyz/. The Chads have kindly provided a simulation that highlights the difference between P and Q.
  3. I was merely calling for accountability. Of course, you are not obliged to answer my call—that is entirely your decision.
  4. You mentioned this is an unfounded hypothesis, which is true. However, so is the assumption that we’ll remain at 47% and never reach the staking target. In my view, it’s valuable to consider all possibilities.
  5. I’m not sure how data from TzKT or TzStats are relevant here, as they don’t display anything related to Q. Regardless, many delegators and stakers don’t conduct research for various reasons and rely on their delegates for information. Therefore, I believe it’s reasonable to keep them informed. Anyway, I do not think it is reasonable to label this as propaganda, as stakers and delegators don’t have voting power.
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94

My apologies if I have offended you; however, in certain parts of your post, I noticed a degree of bias, which is why I referred to it as propaganda.

Specifically, I still disagree with point 2, as to be fully objective, one should clarify that any drop in rewards would depend on the overall staking percentage.

Presenting it as an unconditional scenario seems formulated to emphasize your thesis.

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95

You are correct; however, I don’t believe anyone views it as unconditional. My posts are based on the premise that the goal was to increase staking until the target is reached, which would lead to a reduction in rewards as we approach that objective - and in the case of Q, a higher reduction.

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96

Thank you for your kind response.

To wrap up my contributions to this thread, which is surely becoming flooded, I wanted to reply that part of the debate, in my opinion, stems from the fact that some of us believe the fundamental goal of Adaptive Issuance is to reduce issuance compared to what we had before, as was the original idea in Oxford1 (with staking being a means to that end, not the end itself).

Meanwhile, others of you argue that the primary goal is now to (try to) reach 50% staking (a goal that could, in fact, be set much lower) at the expense of the issuance rate not decreasing, but in fact, increasing.

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97

No @TezoSpanish , we have clearly communicated our position that such a measure is unnecessarily complex and would hinder adaptive issuance’s ability to respond effectively to market conditions. There are more efficient ways to address the current situation, such as adjusting the target to a lower threshold. At no point did we state that the primary goal is to target 50%.

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98

If that is the case, then why has the Qena proposal not considered a modification of the target—from 50% to, say, 30%—as a viable solution?

It is important to emphasize that the only action the Qena proposal undertakes is to remove the existing measure related to the adaptive maximum, without introducing the alternative approach that you have argued for, despite your extensive reasoning.

Given the current circumstances, where the pace of staking has stagnated, one would expect the proposal to at least engage with your hypothetical solutions, such as the one you suggest.

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99

I believe we adequately explained the reasoning behind our approach. We did not implement these changes to allow the network upgrade to proceed while we continue discussing the best solution. Ideally, an out-of-schedule proposal focused solely on economic adjustments could address the proposed changes. The main issue is that there are too many differing opinions, and there wasn’t sufficient time to thoroughly evaluate the best course of action. As a result, we opted for the least disruptive path, with the intention of revisiting the matter after this proposal round. This was mentioned in the first Qena article, by the way.

Given the current circumstances, where the pace of staking has stagnated, one would expect the proposal to at least engage with your hypothetical solutions, such as the one you suggest.

The growth rate of issuance is slowing as we approach the target, so it likely doesn’t require immediate action. We are still far from the hypothetical scenario of being stuck at 47%. In fact, with the projected changes (e.g., XTZChads), issuance is likely to stagnate.

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100

This thread was created on August 13 specifically to address the issue. It’s true that there are too many differing opinions, which is exactly why this thread was created. If you had provided feedback in a timely manner here to lower the target from 50% to 30% during the feedback phase, we might now have other options that included this change without further delay: Quebec C, Quebec D… However by that time you were arguing things like this:

As now there is not sufficient time to adapt Qena to a new target, I propose that you vote for Quebec in the upcoming phases and later put forward an “R” proposal to lower the target from 50% to 30%. You could inject an RA option to removes then adaptive maximum, and an RB option that keeps it.

We still have an issuance rate that remains higher than it was before the Paris upgrade, which stands in stark contrast to the original intent of Oxford1—to reduce issuance compared to previous levels.

Moreover, you mentioned that we are “approaching the target,” yet we haven’t even reached the halfway staking mark (25%) and the progression is clearly stagnated. This characterization strikes me as entirely inaccurate, given how far we remain from the actual target.

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101

This thread was created on August 13 specifically to address the issue. It’s true that there are too many differing opinions, which is exactly why this thread was created. If you had provided feedback in a timely manner here to lower the target from 50% to 30% during the feedback phase, we might now have other options that included this change without further delay: Quebec C, Quebec D… However by that time you were arguing things like this

In the post you mentioned, I also stated:

There are better alternatives to consider. If we believe the chain is secure with a lower staking ratio, we could adjust the target or broaden the acceptable range. If the goal is to halt emissions, we should consider stopping issuance entirely and relying on voluntary stakers.

However, alternatives were not discussed further.

As now there is not sufficient time to adapt Qena to a new target, I propose that you vote for Quebec in the upcoming phases and later put forward an “R” proposal to lower the target from 50% to 30%. You could inject an RA option to removes then adaptive maximum, and an RB option that keeps it.

I could also propose that you vote for Qena, and we adjust the target in the next update. Qena is less disruptive, and if issuance is truly an issue, it’s more likely to be addressed after Qena properly. Rather than trying to push through a proposal to fix something that’s already been resolved, albeit not ideally. From my side, this feels like manipulation, as you’re selectively picking parts of our post to frame us in a way that suits your agenda. It’s also apparent that you haven’t taken the time to thoroughly read the Qena articles.

We still have an issuance rate that remains higher than it was before the Paris upgrade, which stands in stark contrast to the original intent of Oxford1—to reduce issuance compared to previous levels.

Moreover, you mentioned that we are “approaching the target,” yet we haven’t even reached the halfway staking mark (25%) and the progression is clearly stagnated. This characterization strikes me as entirely inaccurate, given how far we remain from the actual target.

Your statement is incorrect. The goal of ‘O’ was never to reduce issuance. While it may have been frequently mentioned, that wasn’t the target. The purpose of adaptive issuance is to prevent overpaying—allowing the system to adjust to market conditions. Currently, it has adjusted in a way many did not expect. But we did and we modeled it and shared simulations.

So it seems you voted for a system that you didn’t fully understand, and now you’re seeking changes without being able to predict their impact. I suggest stepping back to understand the technology behind adaptive issuance. While it’s nice that some podcast discussions mentioned reducing issuance, that’s not the system’s intent. If the goal were simply to lower issuance, there would be no need for adaptive issuance; you would just reduce emissions outright.

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102

Please review the Oxford1 curve in detail. In the scenario with minimal staking, the issuance was lower than prior to the implementation, so what I intended to convey is that the goal was to reduce issuance in any case, while naturally adjusting in proportion to the percentage staked, and potentially even lower. I apologize if my assumption that you had that curve in mind, caused your misunderstanding.

With all due respect, I believe your statement was not clear enough and even somewhat contradictory, particularly in light of the statement I referenced, which may have caused confusion for the technical team requesting feedback.

Understood, I will support the winning proposal in the next phase. I trust everybody will do the same.

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103

Please review the Oxford1 curve in detail. In the scenario with minimal staking, the issuance was lower than prior to the implementation, so what I intended to convey is that the goal was to reduce issuance in any case, while naturally adjusting in proportion to the percentage staked, and potentially even lower. I apologize if my assumption that you had that curve in mind, caused your misunderstanding.

No, that curve is just one part of the equation, and that’s why I say you don’t fully understand adaptive issuance. The other crucial part is the bonus, which is what makes it adaptive. It wasn’t designed to lower issuance unless there is sufficient staking, and that’s about it.

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104

Even with bonus, the top was increased from 5% in Oxford1 to 10% in Paris so with the current staking ratio the issuance would have been reduced from the prior rate.

Will you support the winning proposal in the next phase as I will do? Thanks

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105

Actually, in the development version of O1, it was originally set at 10%, but this was changed to 5% at the last minute. That’s why we proposed a middle ground of 7.5% with Oslo.

As for support, I won’t down vote Quebec. Whether I vote ‘yes’ or ‘pass’ shouldn’t make much difference.

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106

Pass should be enough, thanks.

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108

It was not enough… Everstake doing Everstake things at the last minute.

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