ZIP - Changing Zcash supply curve to 3% yearly after 2020 halving

okay, guess that was poor example.

we need lower inflation to match the markets. we will not perform well against alts with much lower inflation. ZEC market performance has been amongst the worst, and even after halving we’ll still be getting crushed. https://beincrypto.com/5-major-altcoins-most-bagholders/ things need to change. high inflation is literally a form of self harm.

@kek, you’re assuming that the relative market performance is mostly due to inflation. Can you support this assumption? There are many other hypotheses, some leading to an opposite conclusion.

can you point me in the direction of a highly inflationary currency that performs really well?

Of course: Bitcoin. Zcash uses exactly the same inflation curve as Bitcoin (except for the slow start).

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imo, bitcoin is a poor example. BTC had no competition for a long duration. still really has no competition. we’re trying to attract people. today’s world, high inflation (rightly) scares people off. there’s 1000s of alts to choose from.

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I doubt that there is an opposite conclusion possible that the market performance is positive due that high inflation rate.

I made for the last year x calculations versus Bitcoin and the main factor on these is the inflation rate of ZEC and i several times have predicted the price levels that ZEC versus BTC will reach. While this is of course no proof it’s at least an argument that the inflation plays a huge role, even i agree it’s not the only one. But actually it’s simple mathematics, especially versus BTC.

It’s a vicious circle we are in.

  • There since the bear winter no incentive to hold ZEC as it’s clear that it will fall further.

  • It’s obvious that there is more supply than demand. Don’t be fooled by the fake volume a lot of exchanges report and even this is not really a demand.

  • The only thing that could counter the current inflation would be creating at least the same or more demand, obviously you guys struggle with that and it’s mission impossible the next years as it seems.

Actually that’s the biggest flaw of Zcash. I wonder why no economist analysed this in 2016. Actually it’s exactly BTC and the same inflation rate of BTC that ZEC has that got us into the vicious circle:

With our high inflation we have to competete, yes, we compete against BTC because it’s a fight for investors. There is no incentive to hold ZEC if it losses daily to it’s totally wrong choosen copy pasted BTC inflation rate. BTC sucks all up and makes BTC even stronger day by day making many Alt’s including ZEC lossing more and more. I could write some more pages but nobody would read it than again.

What amazes me are the following things:

  • Why didn’t an economist analyse the supply curve prior to ZEC release. But ok, done is done.

  • The inflation rate hurts not only investors, actually it hurts the 20% founders reward and will hurt the a possible 20% new dev fund. I find it amazing that even such proposals or suggestions like this aren’t even considered, researched, whatever.

  • By now 3 years have past with this rediclious high inflation rate. Don’t you guys/girls at least analyse things why we find ourself that low price wise? Sure, there are some minor other issues as well, but that’s just the main reason combined with the of course low demand. If you can’t help increase demand, lower supply, there is just no other option for the next years, easy and simple as that.

  • Just out of curiousity. If the ECC gets a new, let’s say 10% dev fund (for both ECC/ZF) and the price falls down to $25 (absolutly possible!) or even at a lower price level around $15 which is more unlikely but still possible. Are you still that relaxed at these levels?

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always been frustrated with this. built really cool technology, but copy/pasted bitcoin’s economic engine.

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here’s another coin with gross inflation @tromer do you notice anything on this grin chart has in common with zcash

Some good resource concerning the inflation rates of some Alts and conclusions of the influence of Inflation:

Some interesting parts:

However, a high inflation doesn’t matter so much, if there is a high demand. Bitcoin had a very high inflation rate of 208% in 2010 and 59% in 2011, but managed to go up from being basically worthless to 30 US Dollars in mid-2011. The Binance coin has also performed very well in 2018, even though 32% more coins were put into circulation in 2018, than there were in 2017. It has to be stated though, that most cryptocurrencies don’t have a very high demand and are just speculation objects, which leads to prices massively decreasing if a bigger amount of yet undistributed coins and tokens hits the market.

Wrap-up

Inflation of the circulating supply is a factor, that can have a fundamental influence to the price, even though it is not often considered in a price analysis.

==> One of the reasons i use the inflation rate in my calculations and don’t use blind the technical indicators only.

I will analyse some of these when i have more time next week might be interesting to see how some fixed currencies perform in generally:

Inflation_Live

Based on our Inflation Tracker, however, some cryptocurrencies have an inflation far worse than most fiat currencies. The worst offender is Zcash (ZEC) with a shocking annualized inflation rate of ~42% , which implies that its circulating supply increases by 42% annually

@johnwisdom @aeonglacial @phakov @root what do you guys think about this ZIP?

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I respectfully withdraw my opinion from this topic because I am not too knowledgeable about cryptocurrency inflation or even the economics. We haven’t even come out of the womb in terms of actual decentralized services; paying rent by the second, streaming media etc(the many promises of the new crypto economy)…this is all sorta still sci-fy in my opinion. Perhaps we’re are over looking Satoshi’s genius in the inflation rate. Perhaps there’s something he/she/it knows that we don’t.

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Sastoshis inflation rate was perfectly choosen for Bitcoin and only for Bitcoin as the only crypto currency, i doubt he had in mind Zcash when he designed the inflation rate.

That’s the problem with copy/paste parts, that they often don’t work out like on the original invention.

what about the problem of decisions made only to manipulate the price of ZEC??

Satoshis inflation rate was perfectly chosen to make organic demand growing. we should never question it especially not for price manipulation.

There is no better way.
Leave the inflation rate untouched.
i just made my account to say that
stop the nonsense
zcash worked hard enough to get regulatory compliance

This proposal is not manipulating the price, it’s a supply curve change, quiet different.

I agree, it was perfectly choosen for Bitcoin. Did he ever mention that it should be used in Zcash too?
If you think that everything Sastoshi related is perfect the best would be just to stick with BTC.

No problem for me either. I don’t hold ZEC exactly for that reason. If everybody is fine that the price decrease (especially versus BTC) continues some more 4-5 years, so it be.

I fail to see how this one has anything to do with regulatory compliance, but ok, if you think it has, again, so it be :slight_smile:

disagree with just about everything you just said here. thanks for your input, and welcome to the forum.

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Raised objections and issues so far:

still looking to add to this part of the ZIP, but “satoshi is perfect” doesn’t really seem like a good one.

this one might be more valid, might add it, but we’re (most likely) already changing the monetary policy to continue devfund.

the supply curve change is not the main issue… the intentions behind it are. i read the comments and i dont see any reason for the proposal, other than making ZEC price go up.
in general i dont see one good reason to play with those numbers…

Satoshi did not mention that it should be used in Zcash, but the team behind Zcash decided to do so.

privacy coin changes the supply curve to 3% after half of the coins were mined in a much bigger curve has nothing to do with regulatory compliance?

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i’m not sure why you believe changing supply curve would matter to regulators. if changing supply curve was an issue with regulators - imagine they would’ve spoke-up about zcash slow mining start.

50% of the coins already in the hands of miners, early investors and teams envolved in zcash development (mostly)
so changing the supply curve will be good for this group of people
can you find one legit reason to change it if regulatory department of NY asks you about that?

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