bitsong

Prop 32: Inflation Reduction

This proposal is in line with the community's expressed desire for a lower inflation rate in proposal 27 at https://www.mintscan.io/bitsong/proposals/27, acknowledging the need for careful adjustment to minimize any potential disruptions.

Formal Proposal for BTSG Inflation Reduction

Current Inflation: 20%

Current APR: 42.64%

Objective

To propose a reduction in the annual inflation rate of BTSG from the current 20% to 10% for gradual stabilization and long-term sustainability.

Rationale

The current inflation rate of 20% may pose challenges for the BitSong ecosystem, impacting BitSong Studio, artists, and BTSG holders. By voting in favor of this proposal, we aim to initiate a gradual reduction in inflation, fostering positive outcomes for all stakeholders.

Proposed Changes

  1. Inflation Rate Adjustment:
    • Reduce the annual inflation rate from the current 20% to 10%.
  2. Phased Approach:
    • Implement the reduction in steps to ensure a smooth transition.
    • Initial reduction to 10%, followed by subsequent reductions in the coming years.
  3. APR Adjustment:
    • The current APR of 42.64% will be adjusted proportionately with the inflation reduction to maintain balance.

Positive Scenarios

  1. Price Stabilization:
    • A gradual reduction in inflation can contribute to a more stable BTSG price, benefitting both holders and users.
  2. Sustainable Growth:
    • The proposed reduction allows for continued user onboarding while maintaining a sustainable inflation rate.
  3. Enhanced Governance Support:
    • Aligning with the community's desire for reduced inflation, this proposal demonstrates governance responsiveness to user concerns.

Voting Options

  1. Yes - 10% Annual Inflation:
    • Support the proposed reduction to 10% annual inflation for gradual stabilization.
  2. No - Keep Current 20% Inflation:
    • Oppose the reduction, maintaining the current 20% inflation rate.

Governance Approval

This proposal seeks approval from the BitSong Governance, building on the community's prior decision to reduce inflation. The phased approach ensures a balanced transition, fostering sustainability and positive growth.