Hi. Would someone explain me why was proposed to change the staking reward from 1 Clam t o10 Clam?
Give me the good and bads.
Thanx.
Well I didn't make the petition, but it would dilute the supply which would benefit current owners of the coin and hurt future diggers. If you have 10k clams today, you will be staking 10x more clams. If you have 10k undug clams that you will discover and dig up next year, then your supply has not rising at all while the current owners now have more, meaning your value of clams should be less comparably.
This could have the effect of lowering the price of clams as there would be more supply, however stakeholders would have more clam so that should offset any losses in price. Also, the loss in value to future diggers would help offset some of the price/supply issues caused by the increased staking.
It is true that stakers will retain (and even increase as I will explain here) their share of the coin supply. People who actively transact will see their share decline. Currently the stake rate is about 3% per month. If that is suddenly increased by 10x, it will be 30% per month. Someone whose coins aren't staking for just 24 hours out of a month will lose 1% value (coins are ineligible to stake for 4 hours after moving and can't be moved for 8 hours after staking). This will likely lead to increase concentration of ownership over time.
The price decline in the markets will be visible and not helpful. It will appear the coin is doing poorly even though, all else being equal, the market cap would not be affected.
The increase will increase the incentive to stake and secure the network. Currently only about 2/3 of the dug coins are staking.
All three of these effects are temporary as the fixed-reward system converges toward a 0% staking inflation rate regardless of the starting rate. The money supply would have to increase by 10x before the higher reward converges to the same percentage rate as the lower, which will take some time. 3%/month is already a pretty high rate for all three effects IMO.