Monetary Policy Discussion: Generation 1022 (August 19 - September 2 2023)

This topic has been created for the Eco Trustees to discuss the monetary policy that will be enacted on Friday September 2nd 2023. As always, the policy will be in effect for two weeks — this is for Generation 1022, which runs from August 19 - September 1 .

Trustees are encouraged to post via replies under this topic to:

  • Discuss what policy they have proposed and/or are voting for, and why
  • Engage in public dialogue/debate with other Trustees

Community discussion will occur in the #trustee-community channel on Discord .

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I will continue to push for a higher APR to provide more value to $ECO holders and collect useful data. If no high APR proposal is submitted today - I will propose a 20%/30d policy myself.

Pure Macro will remain with a 18%/30 proposal. Nonetheless, we have started to think about a “high” interest rate and supply reduction scenario in an attempt render our proposal monetary supply neutral. Our initial calibration would, of course, be guess work.

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In general I’m not a fan of highly inflationary staking ecosystems, as it indirectly coerces people to lock up their funds just to keep up with the buying power of the asset. My point of view is that while it incentivizes people to not sell their assets in the short term (in order to get some of that yield/inflation), it also incentivizes people to not hold the assets in the long term (since it is regularly debased).

I believe that the macro and crypto environments are both not steady enough for a commitment as long as 90 days. I prefer to have flexibility to react if the environment shifts significantly.

I have held steady at 5.5% yield for 30-day periods, and intend to continue to do so until something changes materially in the environment (which is possible with the Beam/Optimism launch).

I remain open to random inflation and experiments with other tools. I tried random inflation once a few months ago and it seemed like consensus among other trustees was that it didn’t lead to useful observable behavior as there are not many places to spend Eco at (beyond trading it). I look forward to studying policy rationale from other trustees to help me improve my thinking around future policy proposals.

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I am sticking with my same rationale as last cycle, given we are still in the early days post-Beam launch:

In other generations I have been in very much in favour of experiments — and, conceptually, I love those proposed around higher APR proposals & random inflation this cycle — but will abstain from ranking those highly again until things are more stable in the ecosystem.

I am voting for the most-status-quo-like 7% APR proposals as my top choices this cycle, and have ranked the high APR & 0% default proposals as lowest.

Bismarck is submitting a 1% supply decrease alongside a 7% APR, 120-day lockup. The price has slid recently so this is a readjustment in line with previous cycles.

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I agree with the above assessment. Until use cases are more fully developed monetary policy is unlikely to drive adoption and may have negative consequences as outlined. Instead my view would be to communicate policy intentions that best ensure a form of maintaining purchasing power by compensating for inflation rates in fiat. Moreover, I don’t think that posting high returns provides any great information about elasticities given the
nascent nature of the currency.