PIP-21: Update Inflation Parameters on Paloma Mainnet

PIP Name: PIP 21 - Update Inflation Parameters on Paloma Mainnet

Status: Proposed

Author(s): @LARRY

Type: Parameter Change

Discussions-to: PIP-21: Update Inflation Parameters on Paloma Mainnet

Created: 02/27/2023

Simple Summary

This proposal updates the inflation parameters, turning it back on for the long-term stability of the Paloma Chain network.


Update inflation parameters of Paloma Mainnet back to the parameters voted on Paloma Testnet 15 (https://forum.palomachain.com/t/pip-5-update-paloma-inflation-parameters-for-testnest-12/103). Inflation is turned on and Paloma token holders will have incentive to stake their tokens with the Paloma validator set. Now that the Paloma GRAINdrop to the community validators is complete, Paloma community validators will have a premium position to keep the nest warm.


Paloma needs a good tokenomics model that balances inflation/emission, validator incentives and other token holders’ valuation stability. The objective of this parameter change is to update the economics of Paloma so that the focus on fee revenue generation from compute and storage activities becomes a priority for validators on Paloma.

Specification Overview

Update of the Cosmos-SDK parameters as outlined in the technical specification below.

Technical Specification

Paloma Proposed Parameters: Lower Inflation Parameters from Cosmos defaults.

Cosmos SDK mint:

InflationRateChange: 0.04

InflationMax: 0.07

InflationMin: 0.03

goal_bonded: 0.670000000000000000

How to submit the proposal

palomad tx gov submit-proposal param-change <path to proposal.json> \
--from <Paloma Address> \
--gas auto \
--fees 400ugrain \
--chain-id messenger \
-b block -y
  "title": "Parameter change for inflation",
  "description": "Proposal to turn on inflation, so Paloma token holders can earn staking rewards. Further details for this propososal are available on the Paloma forum at LINK TO PIP FORUM LINK",
"changes": [
      "subspace": "mint",
      "key": "InflationRateChange",
      "value": "0.040000000000000000"
      "subspace": "mint",
      "key": "InflationMax",
      "value": "0.070000000000000000"
      "subspace": "mint",
      "key": "InflationMin",
      "value": "0.030000000000000000"
  "deposit": "10000000ugrain"

How to Vote on the Proposal

palomad tx gov vote 5 yes \
--chain-id messenger \
--from="$VALIDATOR" \
--fees 400ugrain \
-b block -y


Cosmos-SDK parameter changes for inflation are standard and should make this update straightforward. No chain restart will be required.

About Paloma

Paloma Protocol is a Cosmos-SDK blockchain protocol custom-built for omnichain communication that allows permissionless controls of any contract on any chain. Built by Volume, Paloma delivers the world’s first intelligently scheduled and automated smart contract transaction execution for the Cosmos ecosystem. The protocol enables developers to remotely control the transmission of value without the need to wrap, bridge tokens, or trust validators with their digital assets. Led by founding members of Sommelier, Paloma is building the primary communication layer of Web3.