I’ve been thinking about this extensively since release. The infinite supply when coins get parked makes it seem like parking wasn’t a solution to the problem but rather just a way of postponing having to deal with it. Don’t get me wrong, I’m a great enthusiast and optimist when it comes to peercoin and now Nubits. I want this to work and I have the confidence in the community to come up with solutions in the future. It’s as the devs said, we can use this innovation until it’s exhausted by which a newer innovation or improvements to it will have already fixed it or replaced it. Bitcoin just came out a couple of years ago and people are already taking the whole system for granted. It’s an innovation and innovation leads to more innovation.
Having said that, I’ve came up with two ideas of how to counter the expected infinite supply issue and since I’m currently in class should be focusing with the prof :P, I’ll just be brief and ask for your analysis and input on the ideas:
Use a forced transaction fee mechanism that adjusts based on the inflation rate ( maybe a derivative of the interest voted on) so the inflation by coins getting unparked balances out with destroyed coins in the transaction fees. Think of it just like miner fees in Bitcoin. Just like transaction fees go to miners in Bitcoin to incentives them to mine, the transaction fees in NBT would be, in essence, paid to the parkers. (As interest rates get higher to reward parkers, transaction get fees get higher to balance the inflation in a manner where it seems like the public is paying the parkers to park by spending higher transaction fees. which also means that the value of the unparked coins with interest will be higher at the time of unparking since the parker will have more coins while public supply of coin will get throttled by the increased transaction fees. hope I made sense lol if someone understands this please feel free to rephrase it.
Take the reward(interest) for parking outside of nubit to limit inflation. Pay rewards for parking in the form of Nushares. The logic is based on the idea that people would park coins because they see potential of long term investment which means they believe in the coin. The best way to reward them in that case is to give them equity in coin in form of nushares. In this manner, NBT inflation is only controlled by demand for it rather than by parking interest. Since the parker gets nushers, he will have even higher incentives to park again to protect his investment. by protecting the peg, he protects his steady income of dividends as well the value of shares he hold. Basically once a person parks, he’ll have more incentive to park the next time and the more he parks the more invested he becomes in Nubit. With all that vested interest, we shouldn’t have a shortage parkers on low demand cycles.
Would love to hear your thoughts on these two ideas. I’m not an economist. I’m a software engineering student but very interested in the topic and the analysis of the nubit system. Please include concrete analysis and test cases if you see a fault in the ideas presented. (Spoken like a true programming nerd lol)
ps: I typed this on my phone so please excuse bad spelling, grammar, missing words.