I have a few concerns and comments surrounding the proposed inflation token structure. I’m not entirely sure what is right for Ren but here are my main issues:
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This type of inflation transfers wealth and power upwards. Those who are not able to afford a darknode will have their investment siphoned by node operators. I think that as DNOs we must consider all stakeholders, including the smaller investors. Not only does this cause small holders to be disadvantaged but it also opens us all up to the risks of centralization. As the largest whales acquire more and more Ren, they gain more power. Do any of us think this could be a good thing? I do not.
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With as little as 20% of all Ren currently being staked in nodes; 80% of Ren is ‘on the table’ in the sense that it will be available for the larger holders to siphon into their own wallets. Could it be that certain whales have decided that there is more potential for profit in doing this than through taking the ever-decreasing monthly DN rewards? Maybe a little paranoid but worth a thought, I think.
That all being said, I do see the benefits that inflation could provide us with. We need funds. Inflation is one method to obtain this funding. It’s clear that I am not 100% sold on the idea of raising funds through inflation, however, if it was decided by consensus that this is the route to take then I would feel a lot more comfortable with there being a hard cap on the maximum supply of Ren. Even better, a period or sustained deflation which could bring the supply back to what it is today.