Proposal: Reduce ACA emission by cutting the dormant farming-incentive tranche

[AntonioBurgos91]

Summary

This proposal recommends halving the monthly native ACA emission from 8,333,333 ACA/month to 4,244,541 ACA/month, by discontinuing the portion historically allocated to farming/liquidity incentives while fully preserving staking rewards. Net inflation drops from ~7%/yr to ~3.5%/yr with no reduction in staking APY and no code change required.

Rationale (verifiable on-chain)

The 100M ACA/year emission — scheduled via scheduler.agenda(#11582700) as a recurring currencies.updateBalance of 8,333,333 ACA/month into the Treasury (aca/trsy) — was designed to fund roughly two halves: staking incentives and farming/liquidity incentives.

The farming/liquidity half no longer maps to any active usage:

Product	Current state
Euphrates (farming)	TVL down ~98.7% from peak
DEX	~$30K total liquidity
Honzon / Loans (CDP)	total debit = 0; aSEED depegged ~97%

As a result, ~4.17M ACA/month is being minted to incentivize products with effectively no users, diluting every holder with no corresponding value creation. Meanwhile the staking pool consumes only ~4.17M ACA/month (incentives.incentiveRewardAmounts = 96.45 ACA / 5 blocks × 43,200 blocks/month).

Proposed change

Replace the recurring 8,333,333 ACA/month mint with a 4,244,541 ACA/month mint. This amount remains above staking consumption, so staking rewards stay fully funded (the aca/urls vault continues to be topped up as it is today). The only effect is removing the dormant farming tranche.

Benefits

• Reduces net token inflation ~7% → ~3.5% per year
• No impact on staking APY
• No runtime upgrade — pure governance/scheduler change
• Reflects economic reality (funding is currently directed at inactive products)

Preimage (utility.batchAll — verified byte-for-byte against runtime metadata)

1. scheduler.cancel(11582700, 0) — cancel the current 8.33M/month mint
2. authority.scheduleDispatch(At 11582700, periodic [216000, 35]) → currencies.updateBalance(aca/trsy, ACA, 4,244,541 ACA)

0x0302080201ecbcb000000000003c0100ecbcb000000101d40c02006d6f646c6163612f747273790000000000000000000000000000000000000000000000d0940b8da3e73a0000000000000000

Open questions for the team

@xlc Would the team support submitting this via general referendum (the same path used to refund aca/urls in #2984)? The target amount is easily adjustable if a larger staking buffer is preferred, or if part of the freed budget should instead be burned to make the change explicitly deflationary. Happy to help build/verify the final preimage.

[xlc]

Unused treasury asset will get burned periodically and unless they are spent, idle asset will just set there waiting to be burned. So it shouldn't make any difference and will eventually get burned.

[AntonioBurgos91]

@xlc That's true in the long run, but the magnitudes don't offset on any relevant timescale (all verifiable on-chain right now):

• Treasury burn: 1%/spend-period (~30d) = ~702K ACA/month (Treasury balance = 70.2M)
• Emission surplus flowing into the Treasury (uncut): ~4.17M ACA/month

Net Treasury change is +3.46M ACA/month — it keeps growing despite the burn. The idle tranche accumulates ~6x faster than it burns. The 1% burn only equals the incoming mint once the Treasury reaches ~833M ACA (~12x its current size), which won't happen for years, if ever.

Cutting the mint at the source stops the dilution before it occurs, rather than clawing back a fraction of it afterwards. Would the team reconsider on that basis, or is there a specific reason to prefer accumulating the surplus?

[xlc]

Opinions are my own.
There is no dilution if treasury is not spent. I personally prefer 'if it ain't broke don't fix it'. Reduce minting won't make any meaningful so I would like to avoid unnecessary changes.

[AntonioBurgos91]

Fair enough — that's a reasonable call. Thanks for engaging on it. Appreciate the transparency.