TL;DR: I am not in favour of this RFC as written because minting fees are being adjusted presently in accordance with RIP-000-001 and this would interface with that. We should re-assess this RFC (or some variant) later, after experimentation with minting fees have concluded.
Wow, it is great to see so much discussion on this thread. It is clear everyone is passionate about making RenVM the best it can be — and although we all seem to have different ideas about how to do this —it is great to see.
I have refrained from posting my opinion on this topic until now, because it is good to get some unbiased perspective from others first. But, with November 16th approaching, it is important that a decision is made about this RFC.
Before diving in though, I would like to thank @DeFiFrog for putting so much effort into this. Regardless of how people might feel about this specific RFC, it is clear that you are putting in a lot of thought and time into helping improve RenVM. For the most part, everyone has been pretty polite, but a gentle reminder that we all have the same end goal, and civility goes a long way to making sure arguments are well-grounded and well-considered.
With that said, I am inclined to disagree with this RFC as it is currently stated
It is clear that burning fees influence minting volume. You can convince yourself this is true with a simple (albeit contrived) thought experiment: would you mint renBTC if the burning fee was 100%? Probably not. RIP-000-001 has already been accepted, and has a clear plan for the next epoch at least, with the goal to gather data about the effect of the minting fee on volumes. Adjusting the burning fee will interfere with that goal. (Thank you @Alexander for your more in-depth, and much less contrived, example of how burning fees impact minting volumes. See this comment.)
This does not mean that I am against the principle of this RFC. I believe that, just as with the minting fee, it is important to experiment with adjusting the burning fee (both up and down) to get a better understanding of its impact. But, to do this properly, it cannot be happening in tandem with adjustments to the minting fee.
I believe that the best course of action is to leave the burning fees as they are for now, and come back to this RFC in the future once the adjusting of minting fees is no longer happening (which should be done by the end of next epoch, or the one after, depending on the impact). A good approach to this would be:
- Finish adjustment minting fees in the next epoch or two and analyse the data.
- Begin adjusting burning fees in the same way and then analyse the data.
- Build an algorithmic model that captures sound reasoning and the data observed.
- Monitor and update the algorithm as needed.
- Enable Darknodes to adjust the precise parameters of the algorithm, within certain bounds, to allow them to respond to market conditions (like a sudden influx of volume).
RenVM is not going anywhere, and continues to grow in chains supported, apps integrated, and number of Darknodes. We are in the early days, and experimentation is important, but we are not presently dormant on that point. Experimentation is presently being done, and we should err on the side of as much isolation as possible (the market is already so independent and dynamic that it is difficult enough to deduce causation).