Brief update on where things stand, nine days after the post-mortem.
The validator reduction discussion is now active. @sigurpol opened an issue today proposing to reduce the active validator count based on core needs — a separate effort from @olanod’s work, but aligned with the same economic reasoning. In an earlier post, I noted the supply-side and cost-side reforms are complementary. That multiple contributors are now converging on the cost-side independently reinforces the point. @burdges raised valid concerns about the security implications of a smaller validator set (the 2/3 Byzantine assumption), which will need to be worked through carefully. But the core economic logic — that Kusama is paying for far more validators than its current activity requires — is now being examined from multiple angles.
The burn proposal fits into this picture. Kusama’s estimated annual inflation is 7.23%, calculated from last era’s validator reward (878.35 KSM) across 1,460 eras per year against a total issuance of 17.75M KSM. Reducing the validator count addresses the cost side. Burns address the demand side. Together, they bring inflation from 7.23% to something sustainable — not through complex financial engineering, but through straightforward supply mechanics that are already proven elsewhere.
Separately, the DAP’s pUSD design is facing design questions about what happens to a DOT-backed stablecoin during market drawdowns. Referendum 1761 already rejected one pUSD implementation (81.4% Nay). The burn model proposed here avoids that class of problem entirely — it works with the native token directly, no collateral design required.
I’m not resubmitting the burn proposal yet. The validator reduction should be evaluated on its own merits first. But the two are complementary — and the case for combining them is stronger now than it was ten days ago.
For those who supported Referendum 627: the analysis holds. For those who voted Nay pending further review: the developments since rejection are making the economic argument, not weakening it.