Someone should run the numbers on my proposal besides myself.
My proposal gained some traction & support on twitter :
#Quick summary of Harmony tokenomics :
An annual total reward of 441M $One are issued from staking. The total circulating supply of $One increases until it’s matched by the network fees burn rate. Burning 441M $One in network fees is unlikely to happen anytime soon, so $One token is inflationary without a capped supply.
#The basics :
Decreasing the circulating supply by refilling the treasury with a certain percentage of the total annual staking rewards will logically increase the price, because rewards earned by validators & delegators will decrease. They would need to increase their holdings if they want to continue earning as much as they do currently. Less supply & more demand, results in price increase.
So I have 3 options :
Option 1) 20% of the total annual staking rewards to refill the treasury and APR per delegator drops from ~10%/9% to ~8%/7% :
- 20% of 441M $One is 88M $One (back into the treasury per year). At current price of $0,027/$One it would take about 40 years to reimburse hacked funds. It could take a year or 2, if $One reaches the price of $1 before being converted or sold.
Option 2) 30% of the total annual staking rewards to refill the treasury and APR per delegator drops from ~10%/9% to ~7%/6% :
- 30% of 441M $One is 132M $One. At current price, it would take about 28 years, but if held on & removed from circulating supply until $One reaches $1 price, the reimbursement could take less than a year.
Option 3) 40% of the total annual staking rewards to refill the treasury and APR per delegator drops from ~10%/9% to ~6%/5% :
- 40% of 441M $One is about 176M $One. At current price, it would take about 21 years, but if held on & removed from circulating supply until $One reaches $1 price, it could take a lot less than a year.
The most drastic option 3 (40%) seems to me like the most impactful one. Reducing inflation rate & circulating supply until the price of $One permits the reimbursement directly from the treasury. In my opinion not a single $One from the treasury for reimbursement should be made until the price per $One reaches $0,5 or $1. (The treasury acts like a long term hold to reduce circulating supply).
Regarding the network fees, they should either continue to burn or could also be used to fill up the treasury.
I hope I was understandable. Good Luck 