I agree with that. However I currently think decreasing voter rewards would be risky, as I see the following ‘unlock’ pressure evolving:
- Growing DeFi ecosystem on CELO: More and more higher yield opportunities are competing with locking CELO for voting
- Vesting: No (or few) CELO from the release contracts has been vested so far. As soon as CELO vests, I see the risk of CELO unlocking for selling on the market or using for other higher yield opportunities
I think it’s impossible to predict how the fraction of locked CELO will evolve, that’s why the protocol has the dynamic adjustment, to find a good market price for a given voting fraction over time.
My reasoning is based on the assumption that >50% should be locked for the security of the network. With currently 60% there’s not too much room, and larger means more secure. On the other hand, locked CELO fraction has only increased so far, even with a decreasing realized voter reward rate.
@thezviad mentioned less CELO locked would be beneficial for the network in terms of a lower validator election treshold as well as more liquid CELO to be used elsewhere in the ecosystem. (Community Fund: CGP 35 and how can we use those funds? - #24 by thezviad)
I agree this is desirable, however think this should rather be achieved via staking derivatives and liquid staking rather than lowering the security treshold? Once liquid staking is supported on CELO, staking reward rate could be securely lowered by much I think.