Saga: Inflation v2

This proposal modifies the Cosmos SDK parameters governing token inflation on the Saga mainnet. Specifically, it sets the inflation rate to a fixed 3% per year and sets the community tax to 100%, thereby redirecting all inflationary issuance into the community pool. Staking rewards will no longer be distributed automatically at the protocol level.

This change enables all downstream token distribution and incentive programs to be managed explicitly from the community pool rather than via built-in staking incentives. Rewards will be disbursed through governance or foundation-approved spending or programmatic logic handled outside the SDK.

The updated inflation model simplifies the chain's economics and governance, allowing for more modular and upgradeable incentive systems at the application layer.

Blog post link: https://medium.com/sagaxyz/redesigning-saga-inflation-8ed875192218

This proposal also adjusts the governance min deposit to reduce spam.

Changes:

x/slashing: slash_fraction_double_sign 0.05 → 0
Sets slashing for double sign to zero (per blog) (tomb-stoning will still happen)
x/slashing: slash_fraction_downtime 0.0001 → 0
Sets slashing for downtime to zero (per blog)
x/mint: inflation_max 0.08 → 0.03
Sets inflation to 3% (per blog)
x/mint: inflation_min 0.02 → 0.03
Sets inflation to 3% (per blog)
x/distribution: base_proposer_reward 0.01 → 0
Sets proposer reward to zero to zero out validator reward (per blog)
x/distribution: bonus_proposer_reward 0.04 → 0
Sets proposer reward to zero to zero out validator reward (per blog)
x/distribution: community_tax 0.042 → 1
Sets community tax to 100% (per blog)
x/gov: min_deposit 250SAGA → 2,000SAGA
Sets governance proposal deposit limit to help reduce spam (not in blog)
x/gov: expedited_min_deposit (not set previously) → 10,000SAGA
Sets expedited proposal deposit limit to help reduce spam (not in blog)
Software upgrade: v0.4.0
Sets the distribution module’s authority to a Saga Foundation address (per blog)

Prop 21: Inflation v2