Proposal to turn off PGF treasury inflation

Governance Ops Proposal 🗳️
1

Inflation is a cost for Namada, so if we must use it, we should use it intentionally.
As of Dec 2, the PGF treasury can use up to 41.8m NAM, which provides a solid runway for Namada’s journey to sustainability.

We propose to turn off PGF treasury inflation, which is currently set at 5%.
If this proposal passes, and if we count the PGF account minting allowance as a direct inflation, total network inflation will be reduced from 8.64% to 3.64%.

PGF data overview

  • To date, approximately 5.5 million NAM have been distributed to fund diverse contributors and contributions within the Namada ecosystem.

  • The PGF account currently has a mint allowance of approximately 41.8 million NAM.

  • These amounts represent a total PGF inflation of approximately 4.42% of the effective supply.

More data on the PGF account and the funded contributions is available here:
https://v2.explorer75.org/namada/pgf

Why this proposal?

  • Inflation is a cost. As soon as new tokens are minted and allocated, they introduce dilution for NAM holders.

  • We value the long-term sustainability and credibility of NAM, and we want to communicate this clearly to the ecosystem and its holders.

  • Inflation mechanisms need control and should be used only when it adds value, supports meaningful contributions, and strengthens Namada and its community.

  • We believe that the PGF account currently has sufficient runway for the coming months, making continued inflation unnecessary at this time.

  • The future fees collected from shielded pool usage are expected to fund the future of our ecosystem in a more sustainable way.

Next steps

If this proposal receives community support, we plan to submit it on-chain on Monday, December 8th.

The on-chain proposal will include the compiled WASM code updating the protocol parameter “pgf_inflation_rate” from 0.05 to 0.00.

Looking forward to your feedback, and let’s keep pushing Namada forward together!

5 Likes
2

If there is so much to support contributors, when is the follow up proposal to support Namadillo interfaces/custom interfaces, Namada Indexer, MASP Indexer, RPC? Also you mentioned that ‘We see IBC relayer support as critical to Namada’s success, and it will be addressed in a forthcoming PGF proposal.’ so when is the other proposal also to reward relayers? It has been almost 3 months since the first draft proposal in early september. On 16 september you said: ‘However, the intention to distribute network ownership to active contributors remains.
We’ll soon present the bigger picture, and then return with a series of clearer, better-structured proposals. Next week, we expect to propose (off-chain) an initial framework for the annual budget allocation, which we expect to periodically evolve with the project’s needs.
We will invite everyone to review it and contribute before the next governance steps, so there will be time for discussion and validation.’

3

Hello @CosmicValidator,

Thank you for your feedback.
I understand your frustration regarding the PGF proposal dedicated to our community.
As Gavin mentioned during the last validator circle:

There’s a lot happening behind the scenes that’s still got Luminara’s PGF proposals on hold, but i think not for much longer. i mentioned in our recent Bonfire, we’ve got some announcements coming

That said, the PGF proposal dedicated to the community is something we aim to advance as soon as possible.

Meanwhile, this proposal to turn off PGF treasury inflation provides important context for holders. It is a clear signal of commitment to a healthy NAM economy and to avoiding inflation that is unnecessary at this time.

4 Likes
4

I support proposal :shield:.

3 Likes
5

Hello Community,

The proposal has been submitted on-chain, and the voting period has started:

Here is the link to access the code attached to it:

4 Likes
6

voted with the Support <3

2 Likes
7

The correct git tree for this proposal can be found here:
https://github.com/namada-net/namada-governance-upgrades/tree/fe4ca282bef3781dd53de15a52de446f4e296845

To verify locally fetch to a local repository then build:

git fetch origin fe4ca282bef3781dd53de15a52de446f4e296845:refs/remotes/origin/prop40-
git checkout prop40-final-wasm
python3 builder/build_proposals.py --directory proposals/mainnet/turn-off-pgf-inflation
sha256sum sha256sum artifacts/wasms/turn_off_pgf_inflation.wasm

sha256 hash of the built WASM artifact on my system after running the above:

19d0d1464f39f4859feaa57670fdd372e0214d3f7e8257ec600b98e8d8ffac43  artifacts/wasms/turn_off_pgf_inflation.wasm

Which matches the data hash field from the proposal. :white_check_mark:

I support this proposal and voted yay.

2 Likes