Namada’s target_staked_ratio is set to “0.4”. This means that if more than 40% of the Namada token supply is staked, Namada’s staking inflation will begin decreasing towards zero.
Such a dramatic change at such an early stage could dampen our momentum by prematurely causing validators to exit from Namada, while not necessarily decreasing stake.
The ratio has risen sharply over the past week or so, and we now have ~36.4% of the NAM supply staked. We think that the time to increase the target is now, and are proposing that the new target be 55%.
The only change from passing this proposal is that staking inflation (and thus, staking rewards) won’t begin decreasing if more than 40% of the NAM supply is staked. Instead, this will begin decreasing if more than 55% is staked.
Further understanding
We’re proposing that the target be 55% because engaged members of our community have signalled that:
a) they favour increasing the rate and
b) they favour a target between 50% and 60%.
Engaged members of our community have also signalled that that this proposal would be a temporary fix, not a permanent solution, and we agree.
We should identify a more permanent solution, but we think that we’ll need some observations after the Phases of Mainnet to better understand and to discuss introducing a more informed solution.
There was a bit more in-depth discussion about some of these nuances summarized here at the end of the idea topic.
it appears that Explorer75 didn’t update, but i confirmed using the CLI (command line interface) that the parameter has been changed to 0.55 on Housefire
Makes sense. This is what I once referred to as A/B testing in crypto. The metrics adjust following market / network demands, not the other way around.
I will be voting Yay on this proposal. My personal cost-benefit analysis is described below:
Benefits
We avoid staking rewards going to 0 in the near future, which can have unpredictable consequences with validators dropping out of the consensus set.
We keep momentum going during phases of mainnet where not much else is possible other than staking (the staking reward acts as a marketing mechanism to stay interested - I’m making money from this woohoo)
We can re-review this once more phases have been enabled, and marketing through other means (functionality, shielded rewards, etc) exist, so it’s more just temporary in my opinion.
Costs
No free lunch. Increasing the ratio means that the cost of security is increased. This is paid by those with less stake towards those with more stake. This is inevitable, but ideally it is set to the minimum required to fulfil the goals.
There is inertia to this parameter change. Stake is accrued to those that benefit by this parameter change, and if it remains in place for too long, it becomes more difficult to reverse the change (since voting power is based on staked nam).
Summary
I see this as a temporary change that will not be in place for long enough for point (2.) under “Costs” to take effect. Otherwise, I would be more weary and probably vote Nay.
We should identify a more permanent solution, but we think that we’ll need some observations after the Phases of Mainnet to better understand and to discuss introducing a more informed solution.
There was a bit more in-depth discussion about some of these nuances summarized here at the end of the idea topic.
Can someone comment on the behavior of the Current annual staking rewards rate parameter?
It’s been 10 epochs since the prop was activated, but I don’t see any changes yet
thanks 
