The Treasury value temporarily hit the 750,000 LPT ceiling and reverted the reward cut to 0% as per the mechanism design. The Treasury has stopped accruing.
The recommendation is to restart the cut on the same terms as LIP-101 had previously passed:
treasuryRewardCutRate: 10%
The mechanism and ceiling are unchanged from the previous LIP. I’d welcome further discussion into whether the 750,000 LPT ceiling is the right number, but given it took 6 months to hit that ceiling this feels less urgent than turning on the rate cut again.
Implementation: the Security Committee set treasuryRewardCutRate to the agreed value after the result of the vote. There would be no other parameter changes.
Please share your thoughts on this topic during the open discussion period
While I support turning the treasury reward cut back on to ensure we don’t leave public goods funding stranded, we should use this opportunity to refine the mechanism.
Instead of routing the full 10% strictly to accrua which we just saw hit its ceiling in a mere 6 months we could introduce a burn mechanic directly here. For example, keeping the 10% cut but allocating 9% to the Treasury and 1% to be permanently burned.
This would elegantly tie into the ongoing discussion opened by dob regarding token sinks. It keeps the funding runway clear for the SPEs, slows down how fast we hit the 750k LPT ceiling again, and sends a strong deflationary signal to the market without adding extra costs for node operators or users.
