Dear community,

There were discussions about reducing Kusama's inflation in a similar manner to the reduction on Polkadot. On Polkadot, it was anticipated that by reducing token supply with constant demand that we would see an increase in the token price. This expected result was not observed.

As a further result of reducing inflation on Polkadot, staking rewards were also decreased. If applied to Kusama this would be disastrous to nominators; they would earn fewer rewards through inflation and also face further reduced rewards as validators apply higher levels of commissions to meet operational costs.

I believe we can maintain existing (or even higher) levels of inflation if we focus on reducing the transferable supply of staking rewards instead of reducing issuance. While the locked tokens can't be sold, they can be used to stake or in governance, similar to existing governance locks. It is important for the security of the network that these locked tokens have some anticipated value. We can, at a later date, look at methods and conditions for unlocking tokens in a manner that won't introduce a supply shock.

This "out of the box" concept is (in my opinion) well paired with Kusama's original experimental theme.

Request:

• Develop functionality to lock a percentage of staking rewards
• This should be driven by a storage value with an initial setting of 0 (all transferable)
• The community should be able to vote on this value via the root track
• Validators should receive fully transferable staking rewards up to the maximum commission
• Functionality should be scheduler friendly, such that we can increase or decrease the amount by increments over time

If this proposal is passed it is my intention to follow-up with other proposals which seek to further define functionality surrounding these locked tokens as well as to suggest other avenues of use.

Regards,
Will