- Decreased inflation
The inflation will only significantly go down if there is success in getting lots of tez to bake and stake. If there is so much success that we’re effectively taking 50%+ of all tez off the market (vs 7% right now) for 7 cycles, it’s not crazy to think that other good things are happening like token appreciation.
Check out the graphs at the bottom of this blog post to get an idea of what kind of emissions we’d be looking at with different levels of staking On Oslo vs. Oxford and Adaptive Issuance – On Tezos Governance
- Delegation vs. the new staking process
Risk of slashing with informed consent should be fine and is a reason for stakers to really hold their bakers accountable and maintain a direct line of active communication. You say there is risk that people don’t switch to staking, in which case we keep our current emissions pretty much intact—a little lower I believe.
The process to stake will be just like the process to delegate. The user will have the option to do either and the explanation will be provided on the differences and on the risk of staking. We will provide a staking option immediately at https://tez.capital when the time comes. Popular wallets will be updated promptly I’m sure.
- Overstaking
Overstaking and overdelegation in general are problems that exist with our delegation/staking model. The silver lining, perhaps, will be that stakers will be much more involved in their situations, given the extra inherent risk and lack of liquidity when putting their tez at stake. This is also a challenge for wallets and dapps to explain the concept of overstaking and overdelegation.
- Increased slashing parameters
Like you said, slashing is rare and bakers care about their reputations and tez to do it either on purpose or via lack of due diligence. The main point for me is that the baker’s tez and staker’s tez is at stake together and it’s locked, off the market. This tez is accountable for the security of all other tez.
- Two newly discovered Adaptive Issuance bugs
I agree, it’s better to address this before implementing Oxford and that’s a stance we all should hold long term. We have 1-2 extra months but we don’t have the ability to mess up and stall our chain by mistake even once. I know these bugs don’t have that ability per se, but rushing all the time to push protocol changes even if they have issues is a dangerous mindset. We’re no longer in a position where “we must rush” to catch up to anything. There is so much of stuff we could be fleshing out instead, see previous response by @simonmcl.
- Price rate, as addition to dynamic and static rate
Relying on some kind of oracle as part of L1 operation is going to lead to problems down the line. Locking up your tez for 4 weeks is hard to manipulate but manipulating the xtz price is not as hard. That’s at least 2 systemic issues with price rate as part of the calculation.
- Gradually decreased minimum issuance
If we gradually decrease issuance as described, that essentially disrupts the free market forces we want to be at play. If people want to stake more, they should be able to and the issuance should change accordingly lower. If there was some kind of cap like 3% and people kept staking anyway, that’s overstaking and overdelegation all over again.
To make this idea work we’d need to set different xtz at stake target levels per each gradual minimum issuance level.
The main thing for me is that inflation goes down significantly only if staking is a huge success. If staking is a huge success, we have an additional 43%~ of tez that cannot be sold without waiting ~2 weeks.
You’re saying that you’re afraid of rapid changes in xtz issuance but the only reason we’d see such a rapid or permanent decrease is if there is big interest and participation, which is a very positive signal.
