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    "comment": "I welcome the initiative taken by those that have submitted this proposal and happy to see the first governance action submitted by the community following the Plomin hard fork.\n\nThe governance action proposes a reduction in the treasuryCut parameter from 20% to 10%. The governance action id is: 941502b0aa104c850d197923259444d2b57cab7af18b63143775465aaacc84f5#0.\n\nThe proposal highlights a potential increase in staking rewards as part of its mathematical justification which would be a welcome impact. Cardano is first and foremost a Proof-of-Stake system which derives its security from stake participation. If a boost to staking rewards leads to an increase in participation, then it is a positive for network security. However, it should be noted that staking rewards have not been 4% for a long time. Like Bitcoin, Cardano has its own reward halvings except that the issuance rate of ADA decreases along a curve and not with sudden drops at roughly 4-year increments like Bitcoin has. As a result, the decline in block rewards over time often goes unnoticed compared to the almost ceremonial anticipation that is witnessed around Bitcoin halving events. Therefore, staking APY is more accurately nearer 2.5-3.0% than it is to 4%.\n\nSecondly, the recent Cardano Economic Parameters Report from the Cardano Foundation highlighted the fact that once all other network variables have been taken into consideration that the actual treasury growth rate has been nearer 25-35% over the past 4 years, higher than the 20% treasuryCut parameter would suggest when considered in isolation. Therefore, a reduction in treasuryCut may not be as drastic as it first sounds. It would be interesting to see it modelled out in the context of all the other variable factors to in order to see an accurate indicator of where true treasury growth would be.\n\nThat being said, it should be noted that this parameter change was considered in isolation and could have been served better with the kind of modelling suggested previously. I think explaining to the wider community that the treasury growth isn’t solely dictated by one parameter and that it may well currently be higher than 20% may have served to ease some of the backlash against what has sometimes been perceived as a drastic reduction.\n\nThe Parameter Committee report on the proposal highlighted that the staking reward boost effect from reducing treasuryCut may benefit larger stakeholders, larger pools and exchanges more than it would benefit smaller pools and stakeholders. This potential to contribute towards a further centralisation of ADA holdings should be considered.\n\nFor example, if the goal was to boost staking rewards, another way of doing this without centralising ADA holdings would be to consider a further reduction in minPoolCost. This would allow smaller pools to boost their APY to a more competitive level more closely in-line with mid to large-sized pools. Older, larger pools benefitted from minPoolCost being a smaller percentage of block rewards, allowing them to generate a more positive looking lifetime APY. New pools in the ecosystem have to deal with a minPoolCost that is a much higher percentage of block rewards and thus encouraging stake participation for them is much more difficult with a less attractive APY. For example, a small pool reducing minPoolCost from 170 to 100 could see a 25% boost to their delegators APY according to the recently updated cardano.org/calculator. Much higher than the 12.5% proposed by this treasuryCut reduction. Larger pools would see less of a boost, thus reducing the risk of further increasing ADA concentrations that this parameter change may have.\n\nFinally, and most notably, the proposal lacks a reversion/recovery plan as mandated by the Constitution. Although it can be argued that there is less of a security concern around this particular parameter and some common sense would say to “just change it back if need be” and let it slide this time, it raises the question of to what extent do Dreps have to also apply the Constitutionality of a proposal to their evaluations?\n\nI am not against the principle of lowering the treasuryCut parameter and would be comfortable with seeing it pass in the future.  Overall, it is a solid first effort as a community-led proposal. I just feel that it would benefit from a recovery plan, for constitutionality, and a little further evidence/modelling to help ease the concerns of the Dreps regarding the true extent of the reduction to the growth of the treasury and it would likely pass in the future. At the end of the day, a proposal has to pass both DRep and ICC/CC votes and at this stage in the voting it is falling short of both at the moment.\n\nI vote “No” on the proposal in its current form."
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