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Columbus-5 mainnet Upgrade for Terra Protocol is on the horizon.
The most anticipated upgrade for Terra Protocol is coming.
The development team of Terra Protocol is actively working on the mainnet upgrade -Colombus-5. This brings a table full of upgrades to the mainnet.
Simplifying treasury module logic- Seigniorage burning proposal
In the central bank of terra protocol which is the treasury, when luna is burned to mint new Terra stable coins, seigniorage is created which currently goes to
- A keyless on-chain wallet which is controlled by Luna governance to fund various activities and innovative by terra ecosystem
- Goes to reward pool, to delegators to validators over a one-year distribution.
As the minting of Terra stable coin becoming exponential, the community rewards and the oracle reward pools become overfunded by the seigniorage distribution.
The Columbus-5 proposal is to-
Burn all remaining funds in the community pool. But the community will be well funded, as proposals are in the voting phase.
All future seigniorage to be burned so that it won't get routed back to community rewards. Also, limit the oracle reward pools. So, minting 1 UST will burn 1$ worth of luna, and the transaction fees go to Staking rewards. This plan will keep the staking fees attractive but not insane.
Other changes in seigniorage distribution
- In col-4,
reward_weighta portion of the seigniorage is placed in a buffer that rewards faithful oracles over a period of 3 years, and1-reward_weightis sent to the community pool.reward_weightis calibrated every 1 month by thetreasurymodule to calibrate burns vs staking returns. - Currently
reward_weightis set to 0, such that all seigniorage is being directed to the community pool - To keep the narrative simple to “staking rewards come from fees, all seigniorage is burned, we suggest the following change:
reward_weightto be set to 1max_changeofreward_weightto be set to 0 - the treasury module will refrain from further changing thereward_weightparameter…
