[Parameter change] Reduce XCT inflation from 7.5% to 2%
Citadel.one Foundation proposes to reduce XCT inflation from current 7.5% to 2%.
Background and Motivation
Recent market events have resulted in less network activity across Cosmos and other blockchain ecosystems. To ease the XCT selling pressure Citadel.one Foundation proposes to reduce the inflation to 2%. Adapting the token emission relative to the overall network activity slowdown will also allow Foundation to invest more into product development.
In case the proposal passes, the inflation will be reduced to 2% annually, which corresponds to ~10,000,000 XCT. Rewards ratio for XCT staking and XCT incentive for staking with Citadel.one Nodes will remain the same at 60/40 respectively.
Discussions on increasing the XCT inflation will be resumed and considered as soon as the market situation becomes more favorable.
I just noticed that the XCT actual token inflation has been far higher than 7.5% since its inception.
I'm not speculating that the smart contract is wrong and you all are lying to us but my conclusion is that big third party unlocks that impacted the total supply have been made.
How to see this:
The price of XCT has gone from 0.6$ at ATHs to 0.012$ today which is lower by 50 times. 0.6/0.012 = 50
On the other hand the marketcap of XCT tokens has gone from an ATH of $6 million to $1.2 million which is actually very impressive considering the market conditions and it's a better performance than many other altcoins. the mktcap of today is 5 times less than the mktcap at ATHs: 6'000'000 / 1'200'000 = 5
There's a very big difference between 5 and 50. even when you factor the 7.5% in basically nothing changes.
I calculated the number of tokens in existance at ATHs on the 17/10/2021 (total supply) by dividing mktcap / price
this gets me approximately 12.5m tokens and now more than 93m exist. so there's been an increase in available supply of 93/12.5 = 7.44x (744% dilution)
as Dimitri pointed out on telegram basically all of it came into circulation from unlocks.
So imo we should focus on reducing those unlocks and making less deals with private investors. XCT for now basically has been an escamotage to raise liquidity from private investors... nothing more. This proposal to lower the network inflation to 2% won't change things.