TLDR: This proposal seeks to adjust the GoalBonded parameter in the inflation module from 50% to 30%. With the current bonded ratio at ~42.58%, the protocol is programmatically increasing inflation to chase an outdated target.
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Lowering the target to 30% acknowledges that the network is already sufficiently secure.
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It immediately flips the inflationary pressure from “increasing” to “decreasing.”
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It adapts the economic model to the reality of token maturity and vesting unlocks.
Summary
This proposal seeks governance approval to update the Dymension Hub’s inflation parameters. Specifically, we propose reducing the staking target (the desired ratio of bonded tokens to total supply) from 50% to 30%.
Currently, the protocol targets a 50% bonding ratio. Because the current bonded ratio is approximately 42.58%, the inflation mechanism interprets the network as “under-secured” and actively increases the issuance rate to attract more stake.
By adjusting the target to 30%, the protocol will recognize the current 42.58% staking ratio as “surplus security.” Consequently, the inflation rate will begin to decrease rather than increase, preserving value for all DYM holders while maintaining a robust security budget.
Motivation
Adaptation to Token Distribution: A 50% bonding target was appropriate for the early-stage network with concentrated supply. Sticking to a 50% target creates a structural inefficiency where the protocol prints maximum rewards to chase a ratio that is realistically difficult to sustain.
By passing this proposal the protocol will recognize that the network is secure and begin reducing the inflation rate.
Addressing Locked Inventory & Capital Efficiency
A critical inefficiency in the current bonded ratio (50%) is the treatment of locked tokens.
A significant portion of the current staked supply consists of locked/vesting tokens (Investors/Core Contributors).
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The Problem: The high inflation rate is designed to “entice” liquidity to stake. However, locked holders cannot leave. They are non-mercenary capital.
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The Result: By maintaining a high inflation target (50%), the protocol is aggressively diluting liquid token holders to pay high yields to locked holders who have no other choice. This is an inefficient use of the security budget.
Lowering the target to 30% acknowledges that the “locked” portion of the supply provides a stable security baseline that does not require maximum inflationary incentives. This allows the protocol to reduce emissions, benefiting liquid holders who are currently bearing the brunt of the dilution.
Specification Overview
Parameter Update This proposal initiates a parameter change.
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Parameter:
GoalBonded -
Current Value:
0.500000000000000000(50%) -
Proposed Value:
0.300000000000000000(30%)
Mechanism of Action Upon passing, the inflation calculation will re-evaluate during the next epoch. Since the current bonded ratio (~42.58%) will be significantly higher than the new GoalBonded (30%), the inflation_rate_change factor will become negative. This will cause the annual inflation rate to decrement block-by-block until it reaches the defined floor or until the bonded ratio drops below 30%.
Conclusion
A 50% staking target is a relic of the launch phase. With a mature distribution and a bonded ratio of ~42.58%, Dymension is secure but economically inefficient. Keeping the target at 50% forces the protocol to increase inflation unnecessarily. Moving the target to 30% aligns our monetary policy with reality, reduces sell pressure, and secures the network at a fair price.
We request the community’s support to optimize Dymension’s economy for the long term.
Governance Votes
YES: You support reducing the staking target to 30% to lower inflation pressure.
NO: You do not support this proposal and wish to keep the target at 50%.
NO WITH VETO: You deem this proposal to be spam or harmful to the protocol.
ABSTAIN: You decline to vote but wish to contribute to quorum.