The Big Vote... My reasoning with Examples from Federal Reserve

I truly believe that keeping as much RPL locked as possible is the right answer. Please, let me explain not through “ponzinomics” but with real world economics.

One of the challenges that RPL is facing is the lack of liquidity whether it’s on an order book or a liquidity pool. There simply aren’t enough buyers to meet seller demand as you recently witnessed by the price falling due to fears around the current vote. Many have voiced their concerns about paying large RPL holders 8-9% inflation on the token. Many have stated that just because they cannot earn interest on the extra amount doesn’t mean they would sell. I would like to point to the US economy as an example for why this line of thinking is wrong.

Currently, inflation is a problem in the US with goods and services becoming more expensive because of too much money circulating in the economy. Right now there’s $2.3 trillion dollars deposited with the reverse repo market at the Federal Reserve. This excess money in the system that individuals have deposited with banks. The banks don’t know what to do with the excessive money so they deposit it with the Fed earning 3%. We’re also seeing interest rates for bonds increasing to encourage bond purchases which pulls excess money out of the system to reduce inflation. Do you think the Fed is concerned about paying 3% if it means preventing inflation going to 10-15%? The same is true for RPL, we shouldn’t be concerned about paying 8% RPL interest per year if the price could fall 50% in a day. If all of this money were to flow freely into the economy inflation would be much higher.

Now inflation with RPL is slightly different but the same principles apply. We want to lock as much RPL as possible; I know people can withdraw by exiting their nodes but should be incentivized to stake due to APR. Just like with the banks parking excess money at the Fed and in treasury bonds to strengthen the USD. RPL is a collateral bond and we WANT whales and others to park as much RPL as possible to encourage ratio stability especially in the early days. The RPL ratio stability and growth is relative, how much RPL is available and not encouraged to be locked up versus the liquidity. If a large number of holders decided to sell and the RPL ratio plummets into the ground it would be very difficult to climb our way out of that hole because you’ve lost investor trust in its stability. That means less funding and sponsorships etc. As our protocol grows and we develop more liquidity for RPL we can more easily absorb people taking profits on RPL. A strong RPL token means a strong protocol but why is that? Well, RPL is effectively our currency. It’s what pays the team and what pays for incentives, advertising/sponsorships etc. The more stable the protocol’s native currency is and the higher it goes the more sponsorships and developers we can pay to more efficiently grow the protocol.

“Why should we pay RPL maxi’s for doing nothing?” The answer is we are paying them for keeping their RPL tokens locked up thus reducing the circulating supply which increases ratio stability. Ratio stability and growth is important because it’s the protocol currency which we use to pay for sponsorships and developers. We’re paying them for taking on the added risk of holding onto a start up.

In the beginning Bitcoins inflation rate was above 100% and we saw exponential growth. Then falling to 10% as the protocol matured more until 1.8% where it rests today. In other words, RPL inflation is not a threat to our protocol rather not incentivizing high amounts of RPL to be staked is. It’s NOT “ponzinomics” it’s economics as shown by the Federal Reserve examples with inflation.
I’ve said my peace, done.