Hi Shawn,
Thank you for sharing your thoughts and technical insights.
Your explanation regarding the technical infeasibility (and UX) makes total sense, I see how this would be too resource heavy. I assume that this would be the case even with inflation at 0%, where stakers earn (they pay for and trigger on-chain logic) and passive holders lose, since each reward claim would still come with way too many balances to update? Unless there would be a way to decrease specific balances only (e.g. matching DOT amounts), which also sounds impossible.
If I understand correctly, that would mean we are technically limited to re-scaling the y-axis in the inflation graph rather than shifting it downwards, to prevent any negative rates that lead to continuous balance decreases.
I hope that in the long run, the treasury can fund its operations sustainably through a non-inflationary source, be that transaction fees or coretime sales or something completely different. Non-interactive staking also reminded me a bit of the idea of an “on-chain bond” (mentioned here) - if, instead of being locked up, the DOT are loaned to the treasury and this is reimbursed by compensating for inflation plus a premium, it could present an alternative way to bridge liquidity until the (non-inflationary) income surpasses spending at a later stage in the growth cycle.
You referred to multiple other economic primitives to mimic the deflationary models - are there any specific ones on your mind besides non-interactive staking?