Community Proposal-03: Removing Max supply + High Level Framework on Supply Growth post Max Supply

Policy Jan 12, 2022

Shoutout: This proposal is strictly inspired and constructed by the Policy community. I barely did anything other than putting the decentralized wisdom together. Special shoutout to MordantBlack(∞) on his suggestion of supply increase cap (sorry if I missed anyone else). Also a super special shoutout to my wife (see picture above) who actually told me "your max supply seems stupid" after scrolling through my Tweets within 5 minute on a road trip....

Context: As established in MiaoShi’s bonding article: The Essence of Bonding for Rebase Protocols - CiaoShi, bonding is essentially a convenient way for Concave to raise capital by issuing more “shares”. It is not necessarily a bad thing as long as it is EPS (earnings per share) accretive to existing stake holders.

A hard max supply cap for Concave is equivalent of telling Elon Musk he cannot issue more TSLA shares after a certain number. Therefore, establishing a hard cap on max supply before we even launch could potentially limit out infinite growth potential.

Proposal:

  • Remove 333 million hard cap max supply.
  • 333 million is now the “Target Terminal Supply” (TTS) after which there will be no planned rebase growth/APY schedule. Instead, supply can continue to growth through opportunistic bonding aiming at create more per share value to existing stakers.
  • All the opportunistic bonding post TTS should be approve by the community. There will also be clearly framework (defined by community) defining when we can bond post TTS. The framework can be decided later but MiaoShi thinks opportunistic bonding is good as long as we are highly confident the following holds true, as established in the bonding article.
  • Rebase rewards will also be distributed to existing stakers following the same supply growth mechanism (i.e. RFV vs. IV) for any opportunistic bonding post TTS.
  • There will also be an emission limit per certain period (e.g. month or year), which means total net token emission = new issuance through bonding - share buy back (see MiaoShi's recent Tweet https://twitter.com/CiaoShi_Concave/status/1481101982786101253 for what this means) should not exceed a pre-defined cap which will be determined by the community later.

Reasoning: as discussed and mentioned by Policy community members, this proposal not only keeps a cap to scheduled supply growth, but also gives us the optionality to continue growing our treasury/project post the TTS in a systematic and controlled manner which aims to sustainably boost EPS for stakers.

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