Projects
![]()
No projects found
Investors
New
DAO Treasuries
DATs
Lend / Borrow APRs
Chains
Categories
Spaces
Osmosis: 2025 Tokenomics Updates
Recorded: July 7, 2025 Duration: 0:55:48Space Recording
Short Summary
Osmosis is gearing up for significant changes in its tokenomics, focusing on reducing inflation and increasing burn rates to foster sustainable growth. The community is actively engaged in discussions about these proposals, which aim to enhance liquidity and overall market performance.
Full Transcription
Thank you. hello hello gm gm can you can you hear me indeed indeed oh is that Patty? Yeah, yeah. What is that profile photo?
It looks so much like you.
Oh, wow. I even have to follow you back.
I didn't... Whoa, what is this?
Yeah, I'm from the depths of the Matrix.
I've come to speak live.
Love the way Patty is.
But what is that photo?
It's from Metal Gear Solid.
It's Otacon Gear Solid. Oh.
It's Otacon's face.
Nice.
Nice.
Is Johnny in here yet? Not just yet. We're waiting
on Johnny. Gotcha.
Well, it looks like Osmosis
is doing relatively
well towards the rest of the
market today. That's cool.
Maybe they knew that the tokenomics Twitter space was going up today.
They're ready to hear Johnny's, Dave's, and Patty's exciting voices.
Got a nice crew here today.
Johnny's having a little technical trouble,
but we'll get him up and him in.
No worries.
His technical trouble is probably just getting coffee.
Very possible.
No, I'm just kidding.
Johnny would never do that.
We need that elevator music
yeah once you start speaking it turns off and i don't yeah i know
you can just sing for us wrong guy for that i don't think so
i've heard you sing in the shower. I'm not bad in the shower.
No one's bad in the shower.
Les Cosmonauts.
Good to see you.
Marty, good to see you.
yeah we have good good community turnouts
Yeah, we have good community turnouts.
well um anyways what's uh see what the status of the proposals are while johnny's
uh waiting to hop on here
one day left on prioritizing the burn over accumulation
um one more day on removing incentives from inflation that's good yeah I'm excited about
talking about this um it's definitely an important i think the narrative in
crypto now is very much focused around reducing inflation and like what the cost of security is
and what's a reasonable amount to spend on security yeah i mean maybe maybe for patty and
dave we might as well just get started right now since johnny just joined um but where where do
you guys think this started from like there was the tweet
from who put the tweet up uh was it hasib or dave do you remember uh which tweet sorry it was like
there it's like there's a new trend starting and uh you know people have realized they've been over
overpaying for state or uh security uh you're
gonna see more chains start to do this like where who tweeted that and like when and how did this
start that was definitely hasi with that tweet but i think it's been happening for longer than that
yeah but when did it like really catch on as like uh an accepted thing because like right now it
seems like it's actually accepted
oh i mean i think this has been a multi-month trend across the space uh of like what is the
staking rate you need i mean i guess it got really big beginning of the year when solana was uh
had the two three months of discussing it and the proposal ended uh pros required a super majority
they didn't get the requisite super majority.
Um, what percent did it fail by?
I think it was under 1%.
Johnny, you may know.
Oh, wow.
I think it was, they got 60%.
Yes.
And they needed 66.
Wow.
How many validators are on, uh, Solana?
I, uh, it's a very large number but it's also uh it's also somewhat
more complex because not all of them are are used in each epoch uh
but i believe the validator counts in the large hundreds. Gotcha, gotcha.
Now, if we count for stake distribution,
how it's the top 33%,
that's a much smaller number,
but I don't know it offhand.
Do you think they'll go for it again
and try and get the super majority?
I don't really know how they view it,
because it's faux pas in a lot of governance systems to take a proposal and then re-propose it shortly after it fails.
But then it was more than a majority passing, so then what's the accepted way to adapt it?
I'm less clear.
Yeah.
There's definitely a few proposals being discussed on their forums.
One of the main big objections there was the complexity of it, where it was not...
Even the people objecting to it weren't even objecting to the lower rate, but rather the
dynamic schedule of the lower rate. Versus like, hey, what if we just did a flat lower rate and
committed to it for X years, and we coulditigate it in Y after X years?
That seemed like the people who voted no on it were in favor of policy of that form.
I think for osmosis as well, it came at a nice time, this narrative, because there was always the third inning events that were going to happen,
which brings the tokenomics of osmosis
kind of to the forefront for all of us here.
And I also think that like the switch
from the sustainability
or the distribution phase of osmosis,
which is what we're coming out of now,
into like a more sustainable,
like what makes,
what tokenomics can make a chain run forever
um and i think that the the narrative shift came at a good time for everyone here i feel
do we think here today the uh the most recent like proposals are sufficient to making it running
sustainably forever or do you think there will be another iteration uh like a year from like
i feel like last year
it was obvious there would still need more iterations kind of a thing but i wonder today
this is sufficient so i think this first round pardon johnny go on paddy it's okay i know i
always like the phrase only a sip deals in deals in absolutes. Well, the question is, do you think?
Not do you know for sure.
I do love a Star Wars reference, though.
I'd actually like to hear Johnny's opinion first, and then I can give my opinion.
Yeah, I think that this first batch of proposals this month is probably not going to be quite sufficient.
And we're probably going to have a few iterations.
And it'll probably, I think over the next six months, we'll get to the point where it's end stage.
And we can just kind of, those tokenomics will be sufficient for the chain going forward.
will be sufficient for the chain going forward.
And then we can rely entirely on any new revenue streams coming in
and improving the volumes that we've already got.
So this is more about kind of laying a decent groundwork for building on.
We're basically building a solid foundation underneath.
Whereas I think at the moment,
it's running off to the sides
and we're still kind of patching as we go.
So yeah, there's quite a few things
happening at the same time here.
What do you think the iterations
will mostly be around?
Maybe we should actually talk about first
what the changes are before we dive into that.
So let's go roll backwards a little bit.
What are these changes that are happening today? And how are they different from the changes from last year,
whether it's just more of something that already has been happening or something completely different?
So we had the third inning happen around three weeks ago now, which dropped inflation from 9% to 6%.
And we kind of didn't really see any drop in staking power and liquidity didn't change either.
So what a lot of these changes are, are reducing inflation even more down to whatever the sustainable rate is.
rate is. So the big changes that are going into place over the next week or two are turning off
liquidity incentives because they just haven't really had an impact on having liquidity show up
and remain sticky and reducing the staking inflation that subsidizes the revenue that stakers also get.
So at the moment, stakers get about 1.5% to 2% APR in real yield,
but then they get around 5% to 6% of inflation on top of that.
So that kind of ties into what we were saying before.
That may be that that's too high a payment
for the security that we need
and we can get away without the inflation.
And then kind of at the same time as that,
there's just kind of a restructuring
of the Osmo tokenomics.
The emissions for osmosis are different
than all of the Cosmos SSA gear chains.
There's the devvesting that is minted.
Every other chain decides to have that investing contract
and we tied it to inflation at Genesis
which is kind of confusing
so the idea is to kind of just make it all a bit
more transparent and make it so
that the inflation that's actually
displayed is the inflation that goes into
circulating supply each day
that's kind of the big changes that are
happening to reduce inflation at the moment.
Do you feel like some of these could have been done even let's say like a year ago? Or is there
something kind of different about what's going on right now versus that you think it all makes
sense today instead? I think it could have been done earlier.
It's just that it's the more you rely on inflation, the scarier this jump is.
So if we're moving to the world of having fully reliance on revenue and removing inflation
effectively, then it's a bigger step to go from having 10% inflation to you've only got
6%, you've got, you've got less to cut, you've got a smaller set.
But I think this is the more cautious way of approaching it.
I see.
There's like this meme kind of in the Twitter space
that basically says like,
Cosmos chains always go down
because of the way their inflation is.
Like, how much truth do you think there is to this
versus it's just like like a like a meme of like people venting
so for uh for me it's like yes inflation is minting so uh like the likelihood that people
are selling in in like a if you're not looking at the market as a whole and the market is a force of
nature,
that's like in insanely difficult to predict.
And if we could predict the market,
like,
you know,
this would be a different conversation that we'll be having.
But I think like one of the good things about osmosis is that we can have
these discussions because we have protocol revenue.
And,
and I think it makes it easier.
Yeah.
To have these discussions because of the protocol revenue that osmos think it makes it easier, yeah, to have these discussions
because of the protocol revenue that Osmosis can bring in.
In terms of, oh, sorry, Dave, please.
To the point of what degree does staking
cause down pressure?
I mean, one reality, it's like pretty well discussed
in the John Charb, like L1 versus L2 value accrual post,
which I think people should really read, is that staking has this serious problem that
you have taxation income, you know, income tax on it, which then, even if you're incredibly long,
implies downward pressure. So as a mechanism to incentivize very long-term holders, it has this fundamental flaw versus
like other forms of what you do.
Now, so it actually adds a lot of value or credibility to the idea of what if you do
just burns, for instance, with revenue instead.
Yeah, the tax one is very real, especially like, I guess, in the US, because it's like
an automatic 40% sell pressure always, or like 35 or whatever.
Johnny, you said earlier, you said like, you think over the next six months that's when you
think it'll be in a really good and happy place for you um what do you think those
those iterations will be over those next six months
so the first one that's going on chain in a few days is the staking reduction.
Then we've also got the liquidity incentives removing happening tomorrow. So both of those
are going to get monitored. So if we see a sudden crash in liquidity or we see sudden
mass and bonding, then it might be that this isn't what we need to do and we need to walk that
back with a proposal.
Or then we need to iterate further and we need to go for further staking cuts.
But that's going to be kind of over a few months, I think.
And that's kind of just the parameters that are on chain right now.
So the one thing that's mentioned in the token on the roadmap um but kind of the
tail end of those few months is having some sort of fee tiering system going in as well which
yeah i'm pretty excited about because something that i've wanted to osmosis to have for ages um
it's just a case of finding the time for people to work on it um i think i think that's something that that could be
really useful to have in place what can you go into details on the featuring system
yeah so it's not fully worked out what the premises will be yet um but the idea being that
osmosis charges are take a fee on all trades. If you have a certain amount of volume that month,
then it might be that you suddenly qualify
for lower take fees,
which makes Osmos the best place to route you through.
But also, you could link that to Osmo Stake.
So it might be that you've got so much volume,
but you've not got any Osmo Stakes.
So you wouldn't get the discount. Is it going be that you've got so much volume, but you've not got any Osmo stakes. So you wouldn't get the
discount. Is it like
on a monthly basis
where it resets at the end of every month?
Or is it like a rolling 30 days
so you don't lose your feet here
on the first
of the month?
I think what we're talking about at the moment was that it would
be a 30 day and then reset.
Because if it resets, then you have to go achieve this again.
And then all the fee tier that you got, you have to go get again.
Yeah, but over the month, it will average out.
If you're doing quite high volumes, it will average out.
Makes sense.
How long?
Yeah, we could go ahead.
Uh, the premise of fee tiering is pretty standard in that, uh,
hey, uh, if there's just one trade, uh, this can often come at a higher fee,
then if you're doing many trades or high volume, then you're more fee sensitive.
So then this automatically
selects for people being a better venue for higher volume operators or like arbitragers,
like give arbitragers a lower rate. So then this keeps the price better in line for everyone
where while the more standard flow is paying kind of the rate that causes the exchange to be sustainable.
To play devil's advocate a bit there, is it possible that giving discounts on fees to those with the highest volume can actually negatively impact revenue in some way?
Or is it just assumed that their increased volume will outdo that?
No, it definitely can negatively impact.
I mean, imagine, for instance,
you set the threshold to get minimum fees.
You set it as high volume equals $1.
It's kind of clear that that would not do much.
So, yeah, how you set thresholds really matters.
And it's probably going to be a dynamic thing of, like, you know,
maybe you have an update schedule with X day heads up.
Who needs, like, where does the highest tier getting the lowest volume come from?
Depends on who it is and what's their option space. Like if it's for sex tax arbitrage,
you actually can get this to be very low fee
and still only increase effectivity.
So the goal would be to set this at a range
where sex tax arb is having a lower fee.
So the price for everyone is
one more in line and actually the lower fee on the sex to x arb generally increases profit as you get
more arbitrage opportunities there's a pretty early uh dan robinson post analyzing this but
kind of intuitively it makes sense of how much volatility do you need before there's a profit
event and um yeah as the taker fee approaches, like lower
spread factors on the underlying pool, this gets, you know, at 0.01% on a 0.01% spread pool,
you get more revenue from arbitrage than from the arbitragers than you would at 0.1% fees on a 0.01% spread factor pool.
When people are being, let's say an asset like Alloyed Bitcoin,
do you think they're normally immediately converting that Bitcoin
or they're just holding an osmosis as Alloyed Bitcoin?
And then eventually down the road,
they'll go and convert it so that they're not having to do it like all the time.
You're absolutely keeping it.
The Bitcoin's inventory on osmosis that you're equating this as this is redeemable because the flat cost and latencies for rebalancing instantaneously is too much.
Like similarly, every market maker has liquidity on each can uh so they can do this like rebalancing
kind of instantly yeah makes sense what what other um what ecosystem does the fee tearing
the best you think or what what uh platform or app even it could even be like TradFi, honestly. I mean, Binance.
FTX, too.
What's Binance's current feature structure?
You have to have some amount of BNB staked and volume thresholds to keep going up the lower tiers.
It's almost a meme.
There's actually a bunch of traders
who do very
high amounts of volume but don't buy the requisite bnb and so they don't get the higher tiers
why is that a meme oh because they they're they'll post on twitter i paid like 10 million dollars in
finance fees and so i'm like why are you vip one just go buy like with that much money you should just go
buy a thousand bnb and become vip five wait why are they not willing to buy the bnb people just
don't bury the features they literally just don't read the structure to like get them
interesting i mean i feel like if they're trading with that much money, there must be like some logic, right?
I am not them, so I can only speak off of their tweets and Twitter replies.
Interesting. Dave, you're making me bearish on VTiers now.
Well, maybe this is where the conversation happens.
Interesting.
Maybe we should look into why those people aren't actually buying no i'm certain the majority of people buy the v&b properly to get the to get the uh fee tier but
there are people who don't yeah how much how much uh dollar value is that so you get the highest fee
tier on bnb uh it's bnb yet right now i don't know what the price of BNB is right now I believe the highest BNB
volume wise is in the billions
per month
like 2 bill per month
it's like $650
per BNB token
okay
it's like less than a million
no the highest
yeah i think
sounds great six hundred dollars times five thousand is uh oh it's more than it's like three
million yeah yeah yeah oh yeah i mean if you're spending 10 million in fees a month it definitely
makes sense to go buy that three million interesting wow we should add that to a note on the fee tier structuring
that people might have maybe they're just completely oblivious to like this knowledge
oh yeah that's a that's one of the risks features um which is what's nice about volume is you kind
of automatically go up it without uh without knowing staking, you kind of have to know,
but it's also a feature of, I don't think it's fair
as long as people are given proper notice
to go learn the rules of the system.
Like what I call it.
I think that's a good distinction to make
between the different fee tier mechanisms
that we could implement.
Like one of them is staking-based fee tiers,
which Dave mentioned there,
and the other one is volume-based fee tiers,
which we're still like internally discussing.
Paddy, if you had one fee tier mechanism
that you could pick to bake
and as the single most important,
and you don't get to say
say staking again um what would you what would you pick for that
um one single fee tier like a single one feature of a feature like how how would you set it up
whether it's like staking gives you uh you know a higher fee or sorry a higher fee tier
um or it's like more volume which what what mechanism of it would you say is the most
important for you um like i think the goal would be like it depends on what the goal is if the goal
is to increase security um then staking based makes more sense if the goal is to increase volume what is your
then what is your goal my my my my opinion is i think the staking based for me as an engineer is
easier to build um and and then we would have feed tiers out and and then we could like test
the thesis that feed tiers are important so like i definitely have like a biased opinion of an engineer and also with the
product hat on i'd like to test the feature first so with both of those being my opinion i would say
that a single like feed here uh bestaking based would be would be the first implementation just to test the thesis does
the does the feature uh apply to uh users that are adding liquidity to pool so like you know the fees
that are being taken from their liquidity that's being provided i think it would just be taker fee
reduction gotcha gotcha gotcha gotcha um yeah like i
wonder oh is it also possible like instead of um like can you just have like a they either do a
lot of volume and they get a fee tier or they can also stake and get a higher fee tier so like or
can they combine the two
yeah i think all of this would be possible it's just it would take a lot of time so like or can they combine the two
yeah i think all of this would be possible it's just it would take a lot of time uh is the is the issue and you think the staking one would be the lowest uh time spent
yeah yeah yeah dave what about you uh yeah i trust parties intuition on it for staking kind of the main issue is
very mild one um which is that in the cosmos sdk you oddly don't have a query for amount staked
uh across all validators so we'd have to add that so it's not uh so it doesn't get like you know
doesn't try to start on the train wait why does the cosmos sdk not have that yeah you know, doesn't try to decide on the chain. Wait, why does the Cosmos SDK not have that?
Yeah, you know, these are great questions
that the world does not know the answer to.
Like poor, literally everyone who has to build a client
for Cosmos, like to get the staked amount,
you have to go iterate over, ask for the staked amount
to each individual validator, then add it together
and then use that
so who provides that query right now um well the chain gives you the query for like each individual
validator i i don't remember if the chain gives a query for the sum of it all or not but in this
what's in state is just per validator so you have to go add it all like some so like so far as most
is you have to do like a hundred something disc reads that's it which is
slow oh yeah it's slower than you'd expect how slow is slow like are we
talking about like five seconds or like it where it should be five milliseconds
no it's should be like too quick to meter.
Or like you can't, like in the microseconds, it's instead milliseconds.
Which that matters if you're trying to serve like a thousand of these at once.
Or if you're running in the state machine.
Let's see.
Just to go back to the tokenomics and not just the feed tiers,
because the feed tiers is something that we're designing.
I think that we're like, so like what the goal is,
is to increase the burn at a simple, to put it simply,
is to increase the burn and reduce the emissions,
which I think is good.
Yeah, it's like burning up a kind of a size in a good way.
Yeah, yeah.
Yeah, so we kind of talked about reducing
the emissions already.
But increasing the revenue is the other big thing.
So the other thing that's going into place tomorrow is that rather than the community pool accumulating a bunch of random assets,
a lot more is going to the Osmo buyback and burn.
So the burn rate will almost double tomorrow,
which, you know know should be impactful um because although our burn is
still lower than the mint um not all mint is you know it might go to state accounts that haven't
been active um you know it might not actually get sold immediately whereas that every single day
the burn is getting bought back and burned yeah i'm actually really looking forward to seeing uh
how works out in broad tomorrow when this past uh willis like on on track to pass by governance
like i don't know doubling the burn is a pretty big deal uh doubling the burn relative to inflation also going down as a is an even bigger burn in theory that
that actually like you would how do you what's the math on that like if it's doubling uh in pure
math right now but the inflation is going down by 33 potentially more then this is actually like quadrupling uh in theory right
yeah relatively it's gonna be it's gonna be a big change relatively nice
patty i would also say like massive props to johnny and dave and everyone internally like
the discussions that we were having about trying to get like the the right tokenomics the
sustainable narrative and like uh listening to the community and and trying to get out like this is
it seems like at the end when everything is all done it seems like it's not that much but like
the the time and energy it took to get to a state where we're all aligned and we knew a path forward that was
in the general direction of correct um sorry for the flowery words there uh but like it took a lot
of time and energy and discussions so yeah gg to the whole team gg gg is it you want to make sure
the path that you're heading down is the right one. And I'm a very cautious person,
which is probably why we've ended up as an incremental steps
rather than just jumping somewhere.
But yeah, it's been great to kind of hash this out
and work out what the end-state dokonomics might look like.
Yeah, I'm definitely not a careful person,
so I would have opted to do all this a long time ago.
But yeah, I do think there's a middle ground that we've been taking that's probably a better thing.
Yeah, and I think that's one of the great things about the Osmosis team is that we have all of these intense discussions in a good forum.
And it's like, yeah, yeah.
And it's one of the joys of working at osmosis i feel
were there any uh more extreme or kind of less incremental ideas that were thrown around
uh when discussing economics changes and what were the spiciest ideas that were thrown
probably some of them were that came from me but but i'll let johnny speak on this
um you can go for aaron because i i think it was i think it was it ranged from things like
just turn off all inflation to use all the community pool to buy back osmo it's like
that kind of thing well yeah i mean i mean some of my ideas were, yeah, like get inflation down to 1% like immediately.
Another idea was push validator counts even further down, but mostly to basically just
like make things a little bit more, well, much more consolidated.
And then, yeah, I did, I did, I think i proposed moving all the community pool assets into buying
back osmo and burning it um or or using it to accumulate more bitcoin so those were my more
extreme takes which i still stand by some of those yeah maybe all of them i think maybe the
most contentious one,
like everything we do, we discuss internally.
And it's the community that in the end decides.
I think we're maybe like a shepherd company
for community governance.
But one of the spicier ones
was definitely the validator set.
So like, yeah, all we can do is suggest changes.
And it's like, we have,
Osmosis has a great community and it's and it's large um but the spicier ones was the reducing the validator set
and there's like many reasons to reduce the validator set and then there's many reasons
not to reduce the validator set um and and that's just such a nuanced topic uh that i think reducing the validator set further
could be good to speed up block times for instance and and like to reduce how fast do block times get
like correlate with like reduction of validator count well okay we can take the limiting case is
the easy which is the centralized roll-up case which i think is um which there it's uh effectively how fast can you make one machine
aka milliseconds um now the second you start you have a goal if you have a global validator set
um like let's say there's validating south africa who should be able to participate correct uh
on relatively level ground your lowest you can get 600 milliseconds but the practice versus theory is very different so uh
like we know okay let me let me phrase the question like this for you then uh dave like
if if the current validator set was to drop to 30 what would it go down to uh block times uh with
its current setup so the difficulty here is it's a little bit... It's surprisingly hard to know the answer to this question precisely.
I could give you a number.
My number would be...
You'd shave an extra 200 to 300 milliseconds off this,
but I can't really know this or stand behind it confidently.
Why?
Because there's this theory explanation for how long things should take.
And then there's the practice of the network topology, which is nobody really knows from
almost all these blockchain networks. How are you peered? Like, validator, going from validator A
to validator B, how many intermediate hops did you go through? And how close to those hops in the network.
Basically, as you peer more nodes,
hey, one of these intermediate hops will be closer,
so then we should expect it to go yet faster
up until your bandwidth limits.
What was surprising was I didn't expect
going from 150 to 120 to increase the block times
for fast validators.
I expected to lower the percentage of blocks
that were going to validators who were running on worse hardware.
How much did it increase by?
It lowered it by 0.15 seconds, which is surprising.
That was very surprising when we did that move.
Why did that happen?
There's two effects.
One was...
Okay, three effects.
One was the validators who left the set
just turned off their nodes,
and then the network reappeared,
and A actually turned out their nodes had worse latency.
The second effect was you had much less gossip internally,
and Tendermint, unfortunately,
uses way too much bandwidth.
Like, more bandwidth than is reasonable.
So that, going from 150 to 120 is a 20% bandwidth reduction,
which actually means that because you're constrained,
the way the behavior works is you kind of,
let's imagine there's a graph of when you need to talk,
you're basically saying nothing.
And then there's like a 100 millisecond period
where you want to say a lot of stuff.
And in that 100 millisecond period where you want to say a lot of stuff and in that 100 millisecond period you don't have enough bandwidth so now we actually got more bandwidth because we
just send 20 less stuff we can send everything we need to send 20 faster um so the combo of
getting that a faster communication and this uh and these slower nodes like out of the network ended up improving things a lot.
So I would say that my opinion on this is maybe a little bit different
from living in the depths of our Discord server
and talking to the validators lower in the set.
And I think that we could speed up block time.
I would prefer to speed up block time by improving the the tech as opposed to reducing the validator set like because some of the some of the lower
validators in osmosis are just great uh and i know it's like a contentious thing um and yeah like
again working i'm in the discord server chatting to validators all the time and they're all amazing
uh so yeah i think that's there's there's one aspect of like lowering block time and reducing the spend
on the validator set.
And then there's the other aspect of like, it's great to work in a community of people
that will, you know, if you have a fix that needs, that's not state breaking, that needs
to, that needs like X amount of validators to run and then those validators are available
to run and it won't, if anything does go wrong, then run and then and then those validators are available to run
and it won't if anything does go wrong uh then and then they can yeah so so yeah yeah so i just
wanted to highlight that as well because i think yeah also already i already gave me a hard start
when he said when he gave the hypothetical 30 validators i think that's way too low for how
decentralized offset is at the moment
yeah just remember this is
purely an idea without the technical
knowledge that people like
Patty, Dave and Johnny have so remember
I'm just a dumb brick
you're more than that Aaron
yeah
much more
thanks guys I'm two dumb bricks
two dumb bricks
but Dave you had... Thanks, guys. I am too dumb bricks. Too dumb bricks.
We'll take Dave.
But Dave, you had talked about a theoretical node located in South Africa and said something about it being on relatively stable ground or, like, you know, sea level.
Are you implying that the network could run faster if all the nodes were in outer space or, like, in the ocean?
Oh. But at sea level?
uh okay i use south africa because it's the basically biggest it's the it's the big city
in the world that's uh or like uh that's also latency wisethest. People normally talk about U.S. to Tokyo, but actually South Africa has a slower connection.
If everyone's in outer...
What does geographic centralization mean
when you're in outer space?
So the thing is, like, Starlink satellites,
most of them orbit far faster than geosynchronous orbit.
So then to actually give you a stable connection,
it's very complicated,
where they
have this very complex network to like have a thing on the ground, track the satellite's position,
and constantly have your packets re-peer to who is the closest satellites.
So, okay, so in other words, if you imagine a bunch of things in geosynchronous orbit in outer space,
and these are roughly at random points
on the geosynchronous or like on a sphere,
this would be slower
because the speed of light got slower,
but because you're further apart.
But yeah, I think this would be slower
than if you're willing to say like, hey, what if
all these, we can have a bunch of satellites who are physically near each other, just on
international grounds, because it's not in part of any country, then you could get the
same, we're all in a single data center effect, but just in space.
Wait, so if Johannesburg is like the worst city to run a validator in, wouldn't networks
not want to delegate in that direction?
So this is a question of what are networks optimizing for?
If you're optimizing...
So I actually think the long term of a lot of blockchains was going to start taking on more inspiration from the rollup roadmap of
the happy path is much better if you're just like a single sequence of rollup right where you have
you just get incredibly fast block times now what did you lose as a consequence of that
you've lost a decentralized liveness if the proposer goes offline, your network goes offline.
You've lost decentralized censorship resistance,
which is very important for a certain number of applications.
But now, there's ways to bring back the short-term resistance.
One is, hey, you're an L2, and you have force inclusions from an L1.
Then you get sensitive resistance at whatever your L1 checkpointing time is.
But another way, another idea is,
hey, what if you have tenement running
at like a one second or two second, one second blocks,
and then you have like a single sequencer thing
that must pull in the checkpoint
from the tenement committee every second. So then you get one second
long short-term censorship resistance and then 10 millisecond blocks or 50 millisecond blocks the
rest of the time. It's actually a great trade-off point. You can use a tenement committee as also
economic security for bridges and you could use this committee as well. So you use this committee for economic security,
for bridging, for short-term censorship assistance,
and you can use it for a liveness failover,
where if the proposer's offline,
hey, the tenor committee can coordinate
and switch to another proposer.
So maybe that takes like,
maybe it doesn't take literally one second,
maybe it takes like five seconds.
I actually think this is going to be a trade-off point
most, a lot of blockchains will end on.
Like either you're competing in the super high security game,
you're competing in the maximal fairness
based off of like user location.
There's no locale advantage.
Or you compete in in the UX game.
And I think the UX game will start looking like this latter one.
Right now, there's people who do a bunch of validators
in a single data center.
It doesn't really feel like a strong long-term equilibria
versus, hey, you have a single sequencer
or a designated proposer and then validators.
In fact, Solana actually looks like this
if you squint a little bit,
where shreds are effectively,
you fixed a proposer for a few second window.
They're producing a chunk of data
every couple hundred milliseconds
that everyone can like stream
process. So this is more of a long-term, yeah, I think this is how that line of work kind of ends
up in, and might be a state of like kind of most tendermint chains in one, two years of
tendermints for these like three other properties, but then the chain designates for poser for like
a 60 second or or 60-minute window
that operates really quickly.
Is that being worked on right now with the development?
Celestria is working on something like this, I believe,
because it ties into the role of stack.
Otherwise, I'm not sure if anyone else is doing things in this line.
Well, okay, so Flash Blocks is doing this
with just better engineering for a single sequence
to roll up towards this,
but not the validator committee
for these other three key problems.
I'd actually like to take the discussion back
to the tokenomics stuff with a question for johnny if
that's okay um in terms of say the few things that we're going to do with these tokenomics updates
are like um reducing staking rewards uh increasing the burn redirecting uh the top of block auction revenue, small changes to transaction fees, and removing liquidity
incentives from the emissions.
Johnny, which do you think is going to be the most impactful for the community out of
those things that we've suggested?
So I'm not really sure at the moment because in terms of raw
emissions the staking is the biggest one but I think that the liquidity incentives
are probably quite actively sold back in every single time so I think that that's going to be quite an impactful one.
And the top of block one, which I think it hints
that in the blog post is going to go into a buyback.
We should have the proposal live in the next day or two
on the forums.
I think that one will be an interesting one because it will provide kind of
sell side liquidity. It won't be a direct burn, but it will increase the liquidity of the Osmo token
in general. Yeah, I'm not too sure which one will be the most impactful, to be honest.
There's lots of little experiments that have all been thought out.
But until we actually see them in practice, we can't determine which is the most impactful.
Everything is an experiment.
Yeah, yeah.
Chills that way.
Dave, what about you?
Which one are you most excited about?
Which one are you most excited about?
I think the highest impact one is absolutely the staking reduction.
And then the second highest impact I think is the burn change, which is on track to pass unless governance and folks change their opinion in the next 24 hours.
I'm most excited for these two because by impact, they're the highest after that, um, take
her fee stuff's really exciting because this is, uh, also helping the demands, uh, like
the revenue side of the equation, not just the, not just the cost one.
Um, Aaron, your feelings.
Thanks for asking me.
I was wondering if you were going to ask me.
I would say the burn, mostly because inflation, the natural... Well, I guess it's more like a question of inflation going down is eventually...
It's always on the map.
But the burn going up more wasn't necessarily more on the map.
So I think if one of the things was
gonna happen then i kind of view the other thing is more pivotal to actually get in and slide in so
for me it's the burn and i think from like even two years ago i was like one of the biggest uh
advocates for getting this burn up i remember making memes with david like two years ago on
the on the berm burn um that's what i was gonna say you've
just been saying burn non-stop for like two years like two years ago everyone's like no it's just a
meme it's not real like no no the burn is a meme until it's real and when you make it real it becomes
very real so so i'm i'm always uh a big burner is that like maybe that can be like a meme like like
like statement like uh big blocks but like big burns
big burn energy
um yeah i think it's also it's just it's just a really interesting phase that the
tokenomics are going into now um i think it's always a tightrope between distribution and burn
and to try and find that sweet spot for me will take a bit of iteration or at least like we
propose the changes and then we go into this like insanely high monitoring stage where we just like
monitor every single piece of public data that we can get our hands on and then like adjust accordingly. I'm kind of in Aaron's boat with the, I think that the burn is going to be, it's like more
narratively and people like communities like to see deflationary tokens. And I think burn
signifies deflationary tokens more than reducing staking rewards because it's more active as opposed to
passive but again i'm just kind of riffing with that statement um but yeah i think i'm super
excited to see to see the what what what happens over the next uh two three months yeah i think
right now is the the the ripe time to also do it because at current token prices, it's
like you can actually do this with much more power going into it.
What do you mean by that?
Yeah.
Like, you know, the lower a price is, the more that can be bought and burned or take
your fees, you know, like the proportion is much higher and
basically much more powerful and impactful long term like a hundred like like a hundred thousand
dollars burned at a dollar versus a hundred a hundred thousand dollars burned at at 15 cents
the token count is substantially higher and then if you know when the revenue and the mechanics actually you know work uh
you know its way um you know downstream will be much more significant it amplifies much further
downstream particularly when you've got a token with a fixed max cap like if it was inflating
forever that that wouldn't be the case but you know we get to the point where there just aren't any more emissions and we've burned this when it was at a low price like yeah yeah what is the total amount
of token tokens burned as of today and then what do we project that'll be in like a month from now
i think we're a little over what 3. 3.2 million Osmo tokens burned to date.
Maybe Johnny can double-check that for me.
But yeah, 3.2 is last I checked.
Yeah, 3.4 at the moment.
And we should probably end up starting to burn about 300,000 a month from the taker fees.
Wow.
So yeah, there might be other mechanisms
that doesn't count the
proto-rev burn
but yeah we won't know until these
proposals actually go into place and we see the
impact
sweet
let's open up the floor to see if anyone
has any questions since we're
coming to the end here.
And if no one has questions,
maybe we come back in and see if we have any other final thoughts,
Johnny, Patty, Dave.
Yeah, I think I would like to,
everyone listening here today or anyone interested,
please do have a read of the forum post and post questions there.
I think most people in the call would be monitoring
or looking and like, I think community feedback
and community involvement.
If we're moving towards a sustainability narrative,
like it takes a community to to build something that's
sustainable long term so yeah please please feel empowered to do that yeah ask questions anywhere
and not just forums but twitter is fine as well discord is fine telegram is fine anywhere is fine
yeah 100 like i push out these proposal texts and they are by no means the final proposal that's going
on chain of the proposal that gets passed.
I try to incorporate Twitter conversations into them, feedback from Telegram too.
But yeah, once they're on the forums, that triggers a discussion period.
And once you're on chain, usually discussion period happens again.
So yeah, post anywhere,
and just tag me,
and we can bring it back to the team as well.
Dave?
No, I strongly echo this.
Please give comments.
This stuff's decided.
It's a community we we want one is what is
best um yeah i'm looking forward to a lot of getting uh a lot of stuff happening and uh kind
of it's also really nice to see the excitement around moving like moving past with economic
decisions like uh you know these things uh it seems like this is some of the highest impact stuff that can happen beyond like new demand sources.
So it's very exciting to see what is the amount that's going to get burned.
Also, it's been interesting to see like do to start doing experiments from the Taker Fee DAO, I think, blanking on the proper name,
liquidity sub DAO, doing experimentation
with different Taker Fee levels.
And this has been a great success, it seems like.
People may or may not have noticed the daily burn rates
have increased due to a lot of the work they've done as well.
Yeah, please comment everywhere.
And this is how we reach uh reach the best decisions
nice well thank you everyone for uh tuning in patty oh sorry i was gonna say and and and if we
get more volume and more protocol revenue and more burn it'll start a great flywheel uh so like
hopefully this is the start of the osmosis flywheel, sustainability flywheel.
Yeah, so hopefully we can look back on this Twitter space
in a few months and be like, okay, nice.
We made some good decisions or at least one good decision.
Yep, the sustainability flywheel has begun.
You heard it from Patty.
Anyways, thank you, everyone.
If you have questions or comments, drop them.
Twitter, Discord, forums,
Telegram, wherever you want.
Email, if you want.
We'll answer. We'll
chime back in.
But also, thank you, Johnny,
Patty, Dave, for speaking
today. And I think
we're good for the day.
Legend. Thank you. Thank you. See you.
Host
Osmosis 🧪
from
Osmosis DEX
