The second phase (Limit) allows a maximum vote of 1024 HVC for the first 59,876 blocks, but 8 HVC for the last ~3,600 blocks so it can transition into to the last phase (Sustain).
I personally would rather see POS for phase 3 as I agree if hash drops significantly there could be potential malicious attacks.
Keccak any comment on the network security during phase 3?
I agree that PoS definitely sounds better instead of 1-8 block reward mining for Phase 3.
Maybe something like 1-2% per year but with daily compound interest like Blackcoin etc.
Even less electricity requirement, no daily miner dumps, controlled inflation. Not bad IMO.