Since the vote has ended and as a community we have decided to change the curve, I assume the next step is to vote on which curve we support.
I’m going to answer my own question. I don’t realize it was posted with the initial procedure. https://www.nimiq.com/blog/nimiq-20-supply-curve-voting-procedure/I am going to write my argument down for #TeamRed here. If we’re changing the curve, we may as well change it to the Red curve for the following reasons.
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The red curve is the best curve for a payment solution. The rate of inflation will slowly decrease over time, which means a more stable currency vs the other two curves. Stable currencies are what is needed if you’re looking to have a payment solution - it’s why Bitcoin has ultimately failed so far in becoming a payment solution and has instead turned into more of a Store of Value. The Nimiq Team has made no secret that they think with Nimiq 2.0 and 1000+TPS that they can become a premier payment solution in crypto with ease of use combined with lightning fast confirmation times which makes brick and mortar solutions feasible - why not vote for a curve that best supports this from an economic standpoint?
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The red curve is the stakers friend in the longer term. Blue and Green both yield better results early, but I think there’s an argument to be made that the red curve encourages long term staking, since the rewards are the most stable over a long timespan. It yields the most rewards out of all the curves after 30 years, and the rewards are relatively consistent to the green curve in particular.
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The red curve is actually very competitive against top tier staking coins right now. I think Tezos is a direct competitor to Nimiq 2.0 despite being more of a smart platform orientated coin, as Tezos has implemented the easiest version of staking in any cryptocurrency I know of to date - something which Nimiq prides itself on (ease of use). The staking numbers are up in the air, but with only 16% of the total supply even voting on the last vote, I don’t think it’s unreasonable to say we won’t really exceed 50% of the total supply staked in the first year - especially with significant %s of NIM locked up in vesting accounts (there’s somewhere between 1 - 1.5 billion NIM locked in vesting accounts from my rough estimation). At 50% staked, the red curve offers 6.31% rewards and 3.06% adjusted rewards p.a. - compared to Tezos which offers 5.63% rewards and only 0.63% adjusted rewards p.a. (as per stakingrewards.com at the time of this post).
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The red curve also offers the best reduction of supply in the supply/demand equation which dictates price of assets. This in combination with the fact that the red curve is still competitive to stake vs the best staking coin available right now in Tezos makes the red curve the obvious choice in my mind if price is your primary dictating factor.
Counterpoints to this argument
- But if we vote for x curve it will provide higher staking rewards which bring users in!
I don’t believe higher staking rewards (or ROI) is necessary to bring in new users. I believe a competitive staking experience will be the deciding factor on whether many stake NIM or not, and making it easy to do like Tezos while beating them out would be enough for many to stake NIM when people do their own research. The red curve achieves this while offers many other benefits that green or blue don’t have the same success in.
- What if people sell their NIM they are holding because they thought they would earn more NIM than they will on the red curve?
We’d have short term negative price action for sure, but the supply/demand equation would dictate that over the medium-long term Nimiq will have a price rise regardless of whether whales dump their NIM or not on the announcement of the red curve winning. A much lower supply per day would mean that once the whales NIM is distributed through buyers, the price would come up if we have even the same demand we currently have vs the selling pressure of all the mined NIM going to exchanges. If we’re entering a bull market like many believe we are due to the historic nature of BTC and cryptocurrency bull markets taking place over 12-18 months after a halvening, then the short term losses would be minimal compared to the medium and long term gains.
Finally, whales who have stored a lot of NIM for the most part would be aware of all of this, and I would be honestly shocked if there was a mass dumping of NIM on the market at the bottom because they aren’t happy with the reduction to inflation. I think they’d be quite the opposite personally, but that’s just my opinion.
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Also I’m sorry for hijacking your thread SirChef, but this is now a battle of the curves thread.
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No please change it… if anything this is a great place to discuss the future curve.
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I agree to most/all of your statements #GoRed