Adjusting the current inflation model to sustain Treasury inflow

Thank you for initiating this discussion, I think how we collectively think about and manage the Treasury will only grow in importance. I have a few rather unstructured thoughts on this topic.

Regarding the monthly in-/outflow chart: Almost all treasury spends are currently priced in fiat currency (event costs, salaries, etc.) and converted to DOT using the DOTUSD exchange rate. The chart suggests that spends increased as measured in DOT, but for planning purposes, having the x-axis in USD may also give some insight. For the outflows, according to dotreasury.com, about 2/3 of overall outflows come from burns, and 1/3 from spends – how this ratio has changed in the past and how we expect it to change in the future seems relevant too.

Also, I feel like a broader discussion regarding treasury management more generally should precede this specific one around allocating a fixed part of inflation. How do we allocate the treasury most efficiently in the long-term? Do we need to come up with a spending budget, and how do we manage this professionally? Different mental models around that may also help – should we treat it like a treasury of a company, or of a (purely digital) nation state? (I lean towards the latter)

The goal of the treasury is to increase the longevity and positive real-world impact of the network while being economically sustainable and minimizing the attack surface. Simply printing more money (DOT) directly to the treasury through governance without closely examining spending sends us down a dubious path that is well-known from central banking and might even increase the attack surface for nation-state level actors (whose resources are priced in any of the world’s reserve currencies).

There might also be other options for the treasury, such as opening up the possibility to loan DOT to the treasury for a certain amount of time for DOT holders, which is rewarded with a certain % APY. The APY should be low enough not to jeopardize achieving the ideal staking rate.

It is not clear to me how all of this will play together with the vision for Polkadot 2.0. However, as you say, exposing those parameters to governance seems reasonable.

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