I’d like to address a concern that I read in various channels, namely that the staker APY is currently too high which gives especially DeFi projects a hard time to compete. There are several points here:
- I don’t think this is the right place to address this, because, if the token holders decide so, the APY should rather be reduced through a lowering in inflation, not through the staking inefficiency. If the changes proposed here (or as an additional upgrade after) come into effect, the inflation parameter should be exposed to governance.
- Not increasing the ideal staking rate and rejecting this change does not necessarily mean that the APY decreases. It depends on the development of the staking rate, of course, but a likely scenario could be that the remaining gap to the ideal rate closes, and not much more enters the staking rate. That could lead to an APY around ~19% (0.1/0.525) compared to an ideal situation with the change of 16.6% (0.1/0.6).