Reduce max supply from 21.4 million to 21 million?

There has been a few suggestions from the community to reduce the total max supply from 21.4 million to 21 million. For those who aren’t aware, early in our history, due to flaws in our privacy tech implementation, it lead to an inflation in supply of about 400,000 coins, this lead us to amending the max supply to 21.4 million. Since then there has been smaller scale exploits leading to some small amount of inflation so in the code the total amount is probably a bit more than 21.4 million but it is hard to determine exactly until we migrate the entire Lelantus pool over to Lelantus v2.

However this amount constantly raises question as newcomers are very familiar with the 21 million number and will ask why the additional 400,000 and leads to a bad first impression for something that happened way back in 2016/2017.

The reason why we kept the 21.4 million number was to be transparent and not be seen as trying to sweep this problem under the rug but I would appreciate community’s feedback on this as I have heard this suggestion several times.

The questions to be answered are:

  1. Should we reduce max supply from 21.4 million to 21 million?
  2. If we do, where should we take it from?
  3. Alternatively, should we consider a tail emission (meaning a fixed small amount of coins to be emitted each year at the end)?

Arguments for reduction of supply

  • Consider the early inflation as accelerated distribution which was already absorbed and distributed to the markets
  • Brings it back in line with Bitcoin max supply which was always the original intended total supply.

The least contentious way to do it is to remove it from the tail end of our emission so that it doesn’t affect current miners or masternodes but only many years down the line. This affects the emission past somewhere in the middle of the 5th halving (20+ years from now). See this table for an idea.

While some have suggested burning it from the dev fund, I’ll be frank, if we do that in its current state, we won’t have funds to continue developing and as it stands burning all the dev reward would not be enough. We receive about 16,000 FIRO a month and 400,000 would mean about 25 months without a development fund. This is still a possibility if for e.g. Firo’s price rises a lot and we have enough funds to last 2 years and just forego our portion of the dev fund for two years.

Note that to continue development and research at current pace, we need about 65,000 USD minimum/month and this is actually much smaller than is ideal. This does not include any budget that is required for exchange listings or promotions which are easily in 6 figure ranges for good ones. Some might argue that destroying the supply now would lead to a price rise, but this is far from certain.

I would argue that in the current cryptocurrency climate a pure donation model only makes sense if you have reached a certain size and have generous rich benefactors willing to fund things which is not without its own issues (for e.g. XMR, Grin, Litecoin) when you’re competing against VC funded projects. I don’t think Firo has reached that stage yet and we are still in the process of rapid innovation and development rather than in just ‘maintenance’ mode.

Arguments for maintaining status quo

  • It may be seen as setting a bad precedent for changing max supply numbers arbitrarily
  • Transparency over what happened.

Arguments for having a tail emission

Alternatively we can implement a tail emission such as in Monero so that there will forever be some emission to incentivize miners and replace lost coins. This technically means our supply is infinite though actual real inflation would be negligible and it is arguable that a small amount of inflation is needed.

  • Ensures there is a continuous reward for miners even many years down the line. This probably needs to be implemented together with something like dynamic block sizes. See Monero’s reasoning here.
  • Don’t need to worry about a 21.4 million max supply anymore.

Personally my idea is that I don’t foresee us forever being PoW and if the community accepts this, we don’t necessarily need a tail emission. I have publicly stated my position that I see PoW as primarily a good method of distribution and building community but once a good part of the supply has been distributed already, there are other consensus mechanisms which are more efficient, less power hungry while retaining decentralization such as Avalanche consensus.

Anyway I hope this will lead to some good debate! Remember stay courteous and state your reasons! We aren’t in a rush to implement this but thought it would be a good time to open a frank discussion and assess community sentiment.

Chinese version:

将最大供应量从 2140 万减少到 2100 万?

有一些来自社区的建议,将总最大供应量从 2140 万减少到 2100 万。对于那些不知道的人来说,在我们的历史早期,由于我们的隐私技术实现的缺陷,它导致了大约 40 万个币的供应量膨胀,这导致我们修改了最大供应量为 2140 万。从那时起,有一些小规模的漏洞导致了一些少量的通货膨胀,所以在代码中,总量可能比 2140 万多一点,但在我们将整个 Lelantus 池迁移到 Lelantus v2 之前,很难准确确定。

然而,这一数额不断引起人们的疑问,因为新人对 2100 万的数字非常熟悉,会问为什么要增加 40 万,并导致对早在 2016/2017 年发生的事情产生不好的第一印象。

我们之所以保留 2140 万这一数字,是为了保持透明,不被视为试图将这一问题掩盖起来,但我希望社区对此有反馈,因为我已多次听到这一建议。

要回答的问题是:

  1. 我们是否应该将最大供应量从 2140 万减少到 2100 万?
  2. 如果我们这样做,我们应该从哪里拿?
  3. 另外,我们是否应该考虑尾部发行(指最后每年排放固定的少量币)?

减少供应量的论点

  • 把早期的通货膨胀看作是已经被吸收并分配给市场的加速分配
  • 使其重新符合比特币最大供应量,这始终是最初的预期总供应量。

最没有争议的方式是将其从我们的发行的尾部移除,这样它就不会影响到当前的矿工或主节点,而只是影响到许多年后。这将影响到第五次减半的中间某处的发行(从现在起 20 年以上)。请看此表以了解情况。

虽然有些人建议从开发基金中烧掉它,但我要坦率地说,如果我们在目前的状态下这样做,我们将没有资金继续开发,就目前的情况来看,烧掉所有的开发奖励是不够的。我们每月收到约 16000 FIRO,400000 意味着约 25 个月没有开发基金。这仍然是一种可能性,例如,Firo 的价格上涨了很多,而我们有足够的资金持续两年,只是放弃了两年的开发基金的部分。

请注意,为了继续以目前的速度进行开发和研究,我们至少需要 65000 美元/月,这实际上比理想的要小得多。这还不包括交易所上市或宣传所需的任何预算,对于好的交易所来说,这些预算很容易达到 6 位数的范围。有些人可能会说,现在销毁供应量会导致价格上涨,但这还远远不能确定。

我认为,在目前的加密货币环境中,只有当你达到一定的规模,并且有慷慨的有钱人愿意资助的时候,纯粹的捐赠模式才有意义,当你与风险投资的项目竞争时,这不是没有问题的(例如XMR、Grin、Litecoin)。我认为 Firo 还没有达到这个阶段,我们仍然处于快速创新和发展的过程中,而不是仅仅处于「维护」模式。

维持现状的论点

  • 这可能被视为树立了任意改变最大供应量的不良先例
  • 对所发生的事情保持透明。

尾部发行的论点

另外,我们也可以像 Monero 那样实施尾部发行,这样就会永远有一些发行来激励矿工和补充丢失的币。这在技术上意味着我们的供应量是无限的,尽管真正的实际通货膨胀可以忽略不计,并且需要少量的通货膨胀是有争议的。

  • 确保矿工即使在多年后也能获得持续奖励。这可能需要与动态区块大小之类的东西一起实施。请看 Monero 的推理,这里
  • 不需要再为 2140 万的最大供应量而担心。

我个人的想法是,我不认为我们会永远是 PoW,如果社区接受这一点,我们不一定需要一个尾部发行。我已经公开表明了我的立场,我认为 PoW 主要是一种分配和建立社区的好方法,但是一旦已经分配了很好的一部分供应量,还有其他的共识机制,效率更高,功耗更低,同时保持去中心化,比如雪崩(Avalanche)共识。

无论如何,我希望这将导致一些良好的辩论!记住要保持礼貌,并说明你的理由!我们并不急于实施,但认为这将是一个很好的时机来展开坦诚的讨论,并评估社区的情绪。

另外,我个人不赞成将这个数字降低到 2100 万以下的建议,因为这显得很随意,而且是基于短期的投机者,他们只是想在最大供应量减少的情况下快速上涨。

这些决定不应该掉以轻心,因为我们是在玩长期游戏,除非你认为 Firo 在几年内不应该再支持矿工/主节点,而只是完全依靠交易费来运作(这将是站不住脚的)。在接下来的减半中,已经有一个困难的决定,即矿工/主节点/开发基金之间的奖励划分应该是什么,但这是另一个主题的单独讨论。

坚持比特币的发行和最大供应量有其理想的力量,这一点不应该被低估。有些人可能将尊重通货膨胀解释为真实的比特币供应量,而其他人可能认为限制总最大供应量更接近原始协议。这是一个观点的问题。

我个人倾向于减少到 2100 万,并从发行的尾部拿走,这会影响到大约 40 年后的矿工/主节点,但不会扰乱现状。

希望到那时我们已经过渡到一个不同的或更有效的共识机制,然后它是高效的和不依赖区块补贴的。

5 Likes

Also personally I’m not in favor of suggestions to reduce the figure to be lower than 21 million as this comes off as arbitrary and based off short term speculators who just want a quick pump because of reduced max supply.

These decisions should not be taken lightly as we are playing the long game unless you believe Firo should no longer support miners/masternode hosters in a few years and just operate solely off fees (which would be untenable). There is already a difficult decision coming up in the next halving as to what the reward division should be between miners/masternodes/dev fund but that’s a separate discussion for another thread.

There is idealogical power in sticking to the Bitcoin emission and max supply which should not be underestimated. Some may interpret honoring the inflation as being true to the Bitcoin supply while others may see as capping the total max supply being closer to the original agreement. This is a matter of viewpoint.

6 Likes

My personal preference is to reduce to 21 million and take it from the tail end of the emission which affects miners/masternodes some 40 years down the line but doesn’t disrupt the status quo.

Hopefully by then we would have transitioned to a different or more efficient consensus mechanism then that is efficient and not reliant on block subsidies.

9 Likes

Agreed to this, I think it makes a lot of sense financially and from a tokenomics perspective. The burn in supply will be positive financially to firos in general, and it won’t disrupt the current batch of miners/masternodes.
Also, 21 million is a much nicer number than 21.4 million too :slight_smile:

5 Likes

I agree with the reduction and tail end emission. Taking 400k from the dev fund, is extremely short sighted, and sounds like something someone who’s only looking to pump&dump would suggest.

2 Likes

Personally, I dont think reduction of supply is needed. The tech is more important though. Other coins such as xrp and Doge have billions of supply. For me, how to make Firo useful in real world application with large enterprises to adopt it, is the ultimate question.

4 Likes

I see no benefit in reducing the may available amount. It is just cosmetics.

3 Likes

I think good mobile wallet and instant send which both will dramatically increase usability is more important than burning those coins.

I personally don’t see issue with 21.4M circulation.

Especially taking them from dev funds would be very sad as dev team is essential for success of Firo.

But if some people insist to burn them, then what about to create new burn address (or use one which exists) and let anybody who wants to reduce circulation to send whatever amount they like there. It satisfies also those demanding decentralization as everybody (who wants) in Firo community can join such effort and sacrifice their coins. :slight_smile:

2 Likes

I don’t think this is needed, just focus on the privacy tech and the phone wallet.

4 Likes

we need instantsend and fast-sync wallet more than this.

5 Likes

Quite heartening to see people focus on technical and fundamental improvements :slight_smile:

5 Likes

I think it is better not to change of the max supply because of this 0.4 million coins, as it is not a good act to change/modify the core money policy due to a minor issue. A total supply of 21.4 million or 21 million does not make too much difference.

Tail emssion is very interesting (similar to monero and grin), as it ensures that future generation will have equal chance to mine firo just like we do. Personally, I think when the emssion reaches 98% of total supply at the 6th halving, the block reward can remain unchanged forever. Though this change is involved with modification of money policy, it keeps equatity between generations and benifits firo in the long run.

5 Likes

Cool so far looks like most think we should be focusing on development instead of altering supply. The reason I bring it up now is cause with the impending ProgPOW hard fork might be a good time to adjust it.

I’m actually quite happy with the feedback thus far as it shows whatever the opinion, they are all looking towards the long term. Please keep them coming!

5 Likes

I agree with focusing on the product-market-fit-way. The revolution is yet to come, but when it does, the best products will win. Just look at the market for videocall-providers last year. Some of them had been working for years with top-notch secure products for health services, and just couldn’t convince their target groups. Within two months of the pandemic their MC multipled by tenfolds, product used by millions, and still rising. I think privacy most likely will be the standard in 10-20 years, not the exception as of now. It takes some time before most people actually understand the need, but when they first do, they will head to the best supplier. As i understand Firo is now super safe. Make it super easy to use and it’s a winner as stated in other words above.
Good work team!

5 Likes

I agree with you. It is not a good act to change/modify the core money policy due to a minor issue.

1 Like

Agree reduce 21 million

21.4M is just as fine as 21.0M
No need for manipulating the supply, leave this for central banks and other shitcoins.

1 Like

Staying at 21.000.000 to believe that it will not increase any more in the future gives a strong message

Hello,
Keeping the 21.4 million is the most transparent solution, so the one I chose. This transparency is important to everyone, especially newcomers and developers who need to remember this mistake.
I think that wanting to forget this misfortune of the additional 0.4 million would be counterproductive for FIRO and its community.

I strongly believe that Firo should change its supply issuance and adopt tail emissions.

Not only does tail emissions continue to rewards miners, so they not sure they’re not fully dependent on the TX fees revenue, it will also be used to reward Firo’s Masternodes.

Currently, the Masternodes are only funded through the block reward, and we could start seeing a big drop in Masternodes with the next halving in 2024. Masternodes are the backbone of many core features in Firo, including ChainLocks and the upcoming Instant Send.

The bigger the Firo project gets, the harder fundamental things like supply issuance will be to change - even if we intend to change it down the line. The 1MB debate in Bitcoin is a great example of this. I propose that we change to adopt tail emissions as soon as possible, so that’s set in the code, even if we decide later on to change our consensus method before it’s ever activated.

These discussions also normally take years to flesh out, and then there is also the the time involved to develop, test and hard fork the implementation.

Firo_tail_emissions

4 Likes