Revamping Nolus Chain Inflation for Long-Term Growth
The NLS token serves as the backbone of the Nolus ecosystem, driving key operations such as gas fee payments on the Nolus chain, network security through staking, and governance participation via the Nolus DAO. Detailed insights into NLS utility are available in the official Token Structure article within the Nolus Knowledge Hub and the Whitepaper.
At the inception of the network, the total supply of NLS tokens has been capped at 1 billion, with a strategic allocation across multiple pools to bolster ecosystem participants. These allocations encompass staking rewards, team reserves, investor distributions, community and lender incentives, strategic partnerships, liquidity provisioning, and bug bounty programs. In pursuit of refining Nolus’ tokenomics and fortifying its long-term sustainability, a pivotal initiative has been proposed: a recalibration of the inflation model.
Adjusting the Inflation Model: Smoothing the Emission Curve
Currently, the NLS inflation model follows a curve that starts with a high emission rate, which then decreases over a 10-year period. The first 8 years of the current model show a rapid decline in emissions, followed by a steady, low rate during the final 2 years. You can view the current curve on WolframAlpha.
Our proposal suggests a more gradual curve, reversing the current model. This new model would emit fewer tokens in the short term, with emissions increasing progressively over the remaining 8.5 years. This adjustment aims to synchronize inflation with the ecosystem’s growth, allowing more tokens to enter circulation as the network matures. The revised curve is also available for exploration on WolframAlpha.
Under the proposed model:
- The same total amount of tokens (approximately 100 million remaining out of the 150 million total staking rewards) will still be distributed.
- The projected inflation variance is expected to stabilize within a range of 3.1% to 4.3%, reflecting a more controlled and predictable emission curve. This adjustment not only mitigates excessive token dilution but also fosters long-term value appreciation as the ecosystem matures.
The proposed adjustment refines the inflation model to better align with long-term objectives and bolster token value retention, enhance the sustainability of the network, and optimize the distribution of NLS over time for greater strategic impact.
The Nolus team has put forward a signaling governance proposal, inviting all stakeholders to engage in the voting process. Should the proposal receive approval, a subsequent blockchain software upgrade will implement the revised inflation curve.
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