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

better call those funds, and tell them they should load up on cheap ZEC
before we kill that inflation! oh yeah!

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Pull request done. Although I have not had time to read this thread. It wasn’t showing as new for me. Sorry kek. will get around to updating it after I have put in a couple more proposals and can give this some time

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imo, inflation numbers will become more important to people because that’s how bitcoin/others will try selling themselves as a better option over more inflationary alts. we have the ability to nip this in the bud!

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from the article:

Whether by fixed or fluctuating schedules, altcoins like ZEC and XRP are showing significantly higher inflation figures. ZEC, for example, currently has an annualized inflation rate of more than 35%.

BITCOIN IS SEPARATE FROM THE REST
For bitcoin, the situation is completely different, with the top-ranked cryptocurrency sporting an inflation rate of 3.97%.
After the 2020 halving, this figure will be cut in half taking bitcoin’s inflation even lower than the current Federal Reserve interest rate.

Many people forget that not only ZEC will halv in 2020 but BTC as well which again will leave us in an unfortunate situation in the BTC/ZEC pair.

With our inflation rate the next 9 years BTC will drain out naturally every high inflation coin, just logical, normal and predictable. No rocket science at all.

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the inflation is too damn high - take the handcuffs off zcash - let her fly!

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It is a shame you couldn’t be in that call yesterday. This proposal got a lot more interest than I thought it would. I couldn’t say much about it. but others had quite a bit to say.

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Is there a link to watch the video call somewhere?

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i didn’t know there was a call. would’ve loved to watch, or possibly participate.

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hey box, it has been a while.

There will be, I would imagine on the foundations YouTube channel. You get to hear my microphone issues and tired voice. heh. I think @sonya has a recording. I didn’t record it. I imagine many people did though as well as sonya.

Edit: it wasn’t live streamed. it was just a google hangout. but quite a few people just sat an listened. I think there was 24 people in there but maybe 8 - 10 talked at some point - No one was dominating the conversation its just the way it was.

I feel bad now, I probably should have pinged you and @lex-node who’s proposal I don’t think I did justice. The announcement was here. To be honest a lot was covered but just at a high level with quite a lot of repetition of what has already been said on here.

Not to fear tho, there will be another one. hopefully after some more feedback from the ECC on the pull requests. Daira said they (I imagine @gtank too) would hopefully get around to reviewing all the ones I submitted this week or so. Then we can adjust them if needed and talk some more.

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I missed it too, at work :shark:
(Actually I wasn’t but was predisposed unfortunately)

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Lurked for a couple of hours until my 3rd-world-internet connection died.

Eran’s comments on how 2-of-2/2-of-3 would work were very interesting.

Guess at some point they’ll make the recording available so I can catch up.

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monthly reminder this ZIP exists!!

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Bumping this one. Why was this never given serious consideration? In light of Halo NU5 and the correlative saddening ZEC price today I did some research about why we’ve let the Bitcoin supply schedule hurt our efforts for this many years.

The poor ZEC performance is one of the greatest inhibitors to adoption of Zcash by the mainstream :frowning: The mainstream user and merchant refuses to interact with a native token that demonstrates weak value accrual.

I’m a bit stunned that this sort of discussion was raised so long ago but it apparently never got taken seriously. Are you around still @kek @boxalex @tromer

Can any body give a TLDR about what I missed?

Kek direct messaged me from an alternate account about this one and said that a ZCAP forum and vote had happened which rejected this proposal.

Do we have an archive of ZCAP voting outcomes somewhere for reference? I’d love to dig back further into the history of decision making by ZCAP and look into who were the individuals seated on ZCAP those points in time.

That’s not hard to find FAQ - Zcash Foundation

Teaser from @nathan-at-least

I have no comment on this specific proposal and I wanted to share three things:

  • The ZIP editors can hopefully explain what steps need to be taken for this proposal.
  • I have started a rust repo, zec-issuance-plots for plotting the existing issuance and potential changes. It’s still fairly incomplete, but has the basic structure for plugging in new issuance models (see ./src/subsidy.rs as the starting point). Patches welcome!
  • ElectricCoin.co will be posting one or more blog posts in the next month about how issuance interacts with Proof-of-Stake, and what that might mean for the proposal we’re developing.
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Zcash were approximately $120 at the time of this comment. I’d like to hear about your revised opinions about this topic now (if you have any), with the advantage of a lived experience where ZEC have gone down about 50% in the 3 years following (under the regime of exceedingly high emission)

All three of Zcash’s development and community institutions (Zcash Foundation, Bootstrap/ Electric Coin Company, and Zcash Community Grants) are having to watch their fund valuations take an enormous write-down. The emission of new coins stands at 3500-3600 coins daily. Taking a conservative estimate: suppose that 75% of the mined coins (80% of the total daily emission) are necessarily market sold within 5 days of acquisition. That concludes to a persistent downward selling pressure of $135,000 - $140,000 daily (assuming $60-65 ZEC). If the broad crypto trend continues to be bearish (even supposing good news, where $60 ZEC is a well defended low), we are likely to see this constant selling pressure manifest as a multiplier affect on market-wide downward/ flat price action.

Perpetual downward valuation of the Zcash coin is bad for everyone (except market speculators who take short positions). Development and community initiatives are less funded, merchants accepting Zcash are pressured to withdraw their support, buyers/ users/ holders of Zcash are put to a financial and social disadvantage, Miner profitability falls which hurts long term network security. To these assumptions, I think that we can reach widespread consensus around a mission to responsibly upgrade the Zcash emission implementation.

I’m working to revive this topic because it seems rational for the community to reaffirm its faith in the leave it as-is emission implementation, or select to deploy a calculated upgrade - which would serve as a good-faith acknowledgement to the reality that things have not been working as they were originally estimated to.

Acknowledgement:
All blockchain networks with Proof of Work emitted supply must grapple with these challenges.

The only thing people say when they bring this topic is price
hence you suggest to change a very critical thing, so those who already hold the coin make money.
Not by usability, technology or natural demand but by manipulations…
not very ethical especially if ECC and the Foundation do it

if you think that high inflation brings the price down, you can earn money with other coins and meanwhile accumulate more and more Zcash.
this is just the better side of the medal.

by the way i dont think that it plays a big factor in the price
Monero has a very low inflation rate and it didn’t outperform ZEC much.
if you compare and look at ZEC/XMR chart for the last 2 years, ZEC was dancing between 0.5XMR to 1XMR
all the cryptocurrencies from this category(ZEC,LTC,DASH,XMR) performed the same way in this cycle despite the lower inflation

I’m happy to see that the (looming crisis of 10-12% supply emission during a bear market, following upon notable underperformance during the 2021 bull market) topic at hand is being put on the table by the ECC team also!

I have shared this opinion privately and will reassert it here, Zcash coin price drawdown during a prolonged bear market presents an existential threat to the objectives of this entire ecosystem.

Not because development will halt (people doing the work will continue to get paid via the Dev Tax implementation), but because community, zodlers, and users/ merchants will throw in the towel at irrecoverable rates. This community has been spread thin for a long time… and times had been good.

Similar to the Federal Reserve, the Zcash ecosystem has few tools that can affect economic outcomes - primaries being 1. fund spending, 2. protocol layer supply emission rate, 3. getting Zcash additional liquidity providing markets (FTX spot trading, Robinhood, Crypto-com, etc etc)

Zcash’s relatively high emission % has remained as an albatross around its neck since the project’s launch 5+ years ago. Unless some bold action is taken to remediate against that negative perception, and its tangibly negative impact on Zcash coin value, then our community is likely to be damaged by the high emission rate for at least 2 more years, and most likely 6 more years (Zcash emissions will not drop to 3% ~a perceived “good” rate by the commons~ until approximately Fall of 2028)

My few proposed reconfigurations for supply emission %

  1. cut the block count variable in half, effectively creating halvings on a 2x faster rate - in conjunction with establishing a minimum baseline annual inflation rate of 1-1.5% of existing circulating supply
  2. as this thread originally proposed: Keep it Simple Stupid, implement a constant 3% emission rate until all 21 million coins have been distributed
  3. similar to #2, but add variability: implement a range bound, randomly selected value between 1-4% emission per 50 blocks - variability to incentivize long term miner/ validator participation because returns normalize toward 2.5% over the longest duration of time

Issuance rate schedule

There are four major possibilities for issuance schedules:

** Keep the current Bitcoin-like schedule completely unchanged.*
** Adopt a schedule that’s strictly equal or lower than the current schedule, thus keeping the 21M ZEC cap.*
** Adopt a “reasonable” well-known schedule that doesn’t maintain the Bitcoin-like limit.*
** Something else further afield.*

Our preference: We have a preference for the second option, a rate that’s lower than the current Bitcoin-like schedule. If this is feasible from a security perspective, we believe it would be acceptable to the vast majority of current and potential future Zcash users, while lowering the costs paid by holders for the security of the network. This option would maintain the 21M ZEC cap. We may find in our research phase that this option cannot support sufficient security, in which case we’ll surface the issue for Zcash users as soon as we formulate the concern.