Stabilizing the Staking Rate, Dynamically Distributed Inflation and Delay Induced Oscillations
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arXiv
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| Main Authors: | , , , |
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| Format: | Preprint |
| Published: |
2025
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| _version_ | 1866911206887915520 |
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| author | Brunetta, Carlo Chaudhary, Amit Galatolo, Stefano Sala, Massimiliano |
| author_facet | Brunetta, Carlo Chaudhary, Amit Galatolo, Stefano Sala, Massimiliano |
| contents | Dynamically distributed inflation is a common mechanism used to guide a blockchain's staking rate towards a desired equilibrium between network security and token liquidity.
However, the high sensitivity of the annual percentage yield to changes in the staking rate, coupled with the inherent feedback delays in staker responses, can induce undesirable oscillations around this equilibrium.
This paper investigates this instability phenomenon. We analyze the dynamics of inflation-based reward systems and propose a novel distribution model designed to stabilize the staking rate. Our solution effectively dampens oscillations, stabilizing the yield within a target staking range. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2510_11065 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Stabilizing the Staking Rate, Dynamically Distributed Inflation and Delay Induced Oscillations Brunetta, Carlo Chaudhary, Amit Galatolo, Stefano Sala, Massimiliano Cryptography and Security General Economics Economics Dynamical Systems Dynamically distributed inflation is a common mechanism used to guide a blockchain's staking rate towards a desired equilibrium between network security and token liquidity. However, the high sensitivity of the annual percentage yield to changes in the staking rate, coupled with the inherent feedback delays in staker responses, can induce undesirable oscillations around this equilibrium. This paper investigates this instability phenomenon. We analyze the dynamics of inflation-based reward systems and propose a novel distribution model designed to stabilize the staking rate. Our solution effectively dampens oscillations, stabilizing the yield within a target staking range. |
| title | Stabilizing the Staking Rate, Dynamically Distributed Inflation and Delay Induced Oscillations |
| topic | Cryptography and Security General Economics Economics Dynamical Systems |
| url | https://arxiv.org/abs/2510.11065 |