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Polkadot Inflation Upgrade Proposal by Kian Paimani
Polkadot developer Kian Paimani has put forward a proposal to introduce a flexible inflation upgrade for the blockchain network. The aim is to tackle issues related to the current inflation logic in the system.
The proposal, detailed in a GitHub document, highlights several challenges faced by the Polkadot relay chain. These challenges include high inflation rates attributed to outdated infrastructure and the ineffective impact of parachain slots on inflation.
One major issue identified is the complexity involved in adjusting the inflation rate, which currently necessitates manual intervention through modifications in the source code rather than a streamlined on-chain governance process.
Furthermore, the proposal acknowledges that Polkadot’s inflation rate is closely intertwined with its staking mechanism, lacking sufficient configurability. This entanglement makes it difficult to accurately forecast inflation and can lead to disruptions in staking activities. The cumbersome process of updating the inflation rate only exacerbates these challenges.
However, the proposed flexible inflation upgrade seeks to address these issues by providing a framework for easier adjustments to the inflation rate through a new module called “pallet_inflation.”
This update “does not propose any changes to the actual inflation rate but rather provides a new technical foundation on which token holders can make clearer and more transparent decisions regarding the future of the DOT token’s inflation in a more systematic manner.”
If approved, the upgrade promises enhanced transparency and understanding of inflation mechanisms. It enables smoother parameterization through governance mechanisms while separating inflation from staking logic.
Paimani also highlighted that the proposal is in alignment with the economic vision outlined in the JAM Greypaper, suggesting its potential as a viable economic solution for DOT.
“While primarily targeted at Polkadot, the system proposed in this RFC is sufficiently general to be viewed as a ‘universal inflation system pallet’ and could be implemented in newly onboarded parachains,”
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