QIP-016: Reduce emissions rate of the network

Author	4d5a
Discussions-To	https://github.com/theQRL/qips/pull/32
Status	proposal/accepted/completed
Layer	meta
Created	2021-08-14

Reduce emissions rate of the network

Abstract

To reduce the emissions rate of the network by a multiplication factor of 0.4x which has been determined through both network and transaction analysis, and with regards to the future economic incentives of Proof-of-Stake.

Motivation

Network and transaction analysis has revealed that the majority of the network hashrate is made up of ~90% for profit miners, with 60% of that from auto-switching bots.

This increases the sell pressure on exchanges compared to our demand, causing the value to drop, and as most of the network consists of for-profit miners, the hashrate drops along with it. Due to a negative value velocity, confidence also decreases, creating a negative market cycle with decreased demand, and importantly, a decrease in the overall hashrate.

With the consideration of general interest to help with the longevity of the network through developer interest; Marketcap, its value direction, and velocity, commands attention in a mostly proportional manner. Coins with a higher marketcap, and with a positive velocity, assuming everything else is equal, will achieve more attention than one with a lower marketcap, with a negative value velocity. A positive value velocity can not only have a compounding effect, but also improve with development efforts by increasing interest.

Additionally, QRL has emitted over 10m tokens in its first 3 years of the project, accounting ~25% of its total slated emissions over a 200 year period. It’s possible to defer higher emissions for when Proof-of-Stake comes into play, in creating its value proposition, rather than distributing that further towards other projects through the effect of for-profit miners.

Specification

At present, QRL follows a per block exponential decay emission curve with a long tail.

The proposal is an emission reduction by a multiplication factor of 0.4x of the current per block coinbase reward. This per block coinbase reward, rather than changing on a per block basis, would remain flat.

The target total population will remain at 105m, with a period to be determined depending on the coinbase reward of the hardfork blockheight, but is estimated to be 28 years.

Upon the release of Proof-of-Stake, this emission is to be further evaluated with consideration to its technical and economic factors.

Considerations

Time is a consideration. Through discussions, it’s estimated that preparation and testing should take two weeks, though the exchange availability to manage a node update can vary depending other obligations, priorities, and staffing situations (such as through seasonal vacations & holidays).

Backward compatibility

N/A

Implementation

A relatively simple hard fork is required.

Security considerations

Dependent on how miners behave, it will reduce the hashrate, which reduces the cost of a 51% attack. However, this attack is negligible for a motivated adversary. This is primarily mitigated by a 300 block reorg limit as well as static and dynamic network protections from both the development team and the user community.

Another possible consideration would be through the reduction in support from mining pools should there be enough contention with the hard fork. This may in turn reduce the diversity of hashrate, due to miners loyalty to certain mining pools.

Citation

Please cite this document as:

4d5a, "QIP-016: Reduce emissions rate of the network," QRL Improvement Proposals, no. 16, August 2021. Available: https://www.theqrl.org/qips/QIP-016.