It looks like @Polkadot DAO will vote on an interesting proposal at the end of the month — fixing the total supply of DOT at 3.14 billion! 👀🫢
I roughly calculated that under this model, the inflation of DOT is expected to:
Decrease to 5% between 2028 and 2029
Drop to around 1% by 2044
And if the treasury continues to flow in at an inflation rate of 15%, then around 2033, the annual income of the treasury will drop to about 10 million DOT.
In other words:
In the next five years, from 2025 to 2030, it is still a phase of ample funds, suitable for large-scale ecological construction.
But after 2035, the treasury's annual income will be below 10 million DOT, and governance will need to be more budget-conscious!
So, assuming that staking remains at 50%, we will see:
In 2027, after the first reduction on π Day, staking rewards will fall below 10%
In 2033, after the fourth reduction on π Day, staking rewards will fall below 5%
This means that around 2027, we need to pay attention to the decline in rewards and adjust commissions or operating costs accordingly.
In the next 5 years, before 2030, we can still attract staking with a high APY of approximately 7% – 12%. However, after 2033, we will need to rely on other economic incentives to maintain security.
Perhaps proof of personhood can be developed to replace DOT staking to ensure network security~ 👀
x.com/polkaworld_pro…
Or validators may need other income distributions, such as sales from core and sharing of network transaction fees.
So looking at it this way, perhaps Polkadot DeFi will only start to enter a truly strong growth phase in 2027? 🤔
