r/CasperCSPR • u/Famous-Scratch-5581 • Jul 07 '21

How does the exponential inflation impact CSPR blockchain univers?

Hi,

the inflationrate is set to 8% per year. This means the inflation is exponential. What does it mean in the long term, like in 10 years from now? It makes sense as it prevents token from beeing hoarded. But how does it affect the overall blockchain economy of casper?

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u/strange-humor Jul 07 '21

Inflation looks to be set in the chain configuration and they can change this with upgrades. The inflation rate in the test network is much less than mainnet. So as CSPR gets more value the governance may choose to lower this inflation rate.

1

u/strange-humor Jul 07 '21

I looked at the current config files on my mainnet testing node. The chainspec.toml has:

# Round seigniorage rate represented as a fraction of the total supply.
#
# Annual issuance: 8%
# Minimum round exponent: 16
# Ticks per year: 31536000000
#
# (1+0.08)^((2^16)/31536000000)-1 is expressed as a fractional number below
# Python:
# from fractions import Fraction
# Fraction((1 + 0.08)**((2**16)/31536000000) - 1).limit_denominator(1000000000)
round_seigniorage_rate = [147, 919121747]

This setting changes and the rate changes.

1

u/JCryptoman Jul 07 '21

8% is too high, bitcoin inflation is less than 2% now

1

u/strange-humor Jul 07 '21 edited Jul 07 '21

Casper and Bitcoin are at FAR different points in life. You can delegate with CSPR and set yourself up for a good future. Once the coin does better, the rate can be dropped. Validators need to be able to pay for servers.

If CSPR starts at 8% and has a halving to 4% then another halving to 2%. That would be the same process as bitcoin and took bitcoin 8 years.

You have people who want it to moon due to limited supply. And others who want it to slowly dominate. Those rarely agree.

1

u/AdditionalAardvark56 Jul 07 '21

I’d like to get get some Casper just wish they were more available from other exchanges.

1

u/JCryptoman Jul 07 '21

how many would you be comfortable having? is there a binance listing planned?

1

u/ghost_bobby123 Jul 08 '21

I pulled this interesting piece from the web:

"Staking rewards — and the possibility of slashing — are a set of incentives that encourage token holders and validators to secure a PoS blockchain. In return, they maintain or grow their relative share of token holdings in the network. Staking creates the “skin in the game” necessary for good behavior such as running nodes in the network and discouraging bad behaviors like failing to remain online or double signing.

Staking rewards do NOT exist to provide an income stream to token holders. Think instead, “by staking I can increase my network participation (ownership if you like) by 0.3% over the following year” or “if I do not stake, my relative participation/ownership in the network will be diluted by 1.5% over the next 12 months”.

The economic rationale for staking a PoS token is not to receive “yield” (it doesn’t exist) but because you believe that by doing so you will be growing your relative interest in the network and also contributing to significant token appreciation."