Note: start by reading the Capped & Stepped Inflation General Info Overview!
Below lies an example of a Capped & Stepped inflation model that exerts Soft Pressure on DOT holders to replace inflation with revenue, reduce expenses & maintain Market Cap valuations on an expedited timeline!
You can produce your own Capped & Stepped models with the Polkadot Inflation Tool Calculator!
(Soft Pressure) Laki’s Pie - Banana Cream Edition - 2 year periods, 13.14% Steps - 3.14B Cap
This model produces a highly memeable, psychologically resonant framework riffing on the Pi & Circle theme.
It produces a gradual pressure on the network to perform on timelines more extreme than today’s fixed 120M DOT inflation schedule.
Let’s explore:
→ The Green line shows Total Supply under this model.
→ The Blue line shows Inflation by year under this model.
→ The Grey line shows Supply under current model.
→ The Yellow line shows fixed inflation of 120M DOT (current model).
This model will reached the supply cap in 2061!
Now let’s look at the impact on staking reward APR when reducing inflation without increasing revenue by introducing a Red line:
Staking APR by year:
2025 ~14%
2026 ~11.3%
2028 ~8.7%
2030 ~6.9%
2032 ~5.5%
2034 ~4.5%
2036 ~3.7%
2038 ~3.1%
2040 ~2.6%
2042 ~2.2%
2044 ~1.9%
Let’s see what sort of Market Cap we would need maintain maintain the USD value of current expenses ($450M) by switching to a Logarithmic Scale and adding a purple line.
The New Red LIne (sorry for the colour confusion 
) Shows maintenance of expenses reduced to $90M.
This chart (The Network Revenue Pessimist’s view) reflects the above the MC Goals by year with approximate MC of other industry projects for reference:
When setting a new Capped & Stepped inflation schedule we must consider realistic expectations on the network to reduce expenses, increase revenues, and maintain Market Cap valuations.
What now?
→ Return to the Capped & Stepped Inflation General Info Overview!
→ Explore a Hard Pressure Capped & Stepped Model!
→ Explore a Medium Pressure Capped & Stepped Model!
→ Signal on-chain by voting for your favourites with your DOT!
Otherwise we request that you please engage in respectful discourse regarding this model below.