# Setting a realistic target for coretime sales

## Background

This proposal aims to adjust the parameter that controls the ideal target for coretime sales to a value that better reflects the expected demand of Kusama cores. This change will help stop coretime prices from being driven to near-zero and instead drive prices to a more realistic value, benefiting the Kusama ecosystem.

The main utility of KSM is to pay for coretime (which gets burned), but current prices are virtually 0, making it hard for the system to benefit from its main product offering. Elastic scaling will help grow demand for coretime and thus KSM, and there might also be new sources of KSM demand like Kreivo's memberships, but we need to adjust the core business model.

## Proposed Change

This proposal focuses solely on adjusting the `ideal_bulk_proportion` parameter:

* Setting `ideal_bulk_proportion`: From `100%` to `40%`

> The proportion of cores available for sale which should be sold.  
> If more cores are sold than this, then further sales will no longer be considered in determining the sellout price. In other words, the sellout price will be the last price paid, without going over this limit.

## Rationale

A previous proposal ([Referendum 507](https://kusama.subsquare.io/referenda/507)) included both this parameter change and an inflation reduction. However, community feedback, particularly from validators, raised concerns about the inflation reduction component. Validators expressed that reducing inflation would make validator operations unprofitable, potentially harming network decentralization and security.

This modified proposal addresses those concerns by focusing only on the coretime sales parameter, which has received broader support. By setting a more realistic target for bulk coretime sales (40% instead of 100%), we can help discover coretime's true value while maintaining the current inflation rate that supports validator operations.

Note that this number is not set in stone; it's a starting point that can help us better discover coretime's true value. The parameter can be adjusted in the future based on market response and ecosystem needs.

## Future Considerations

This proposal is part of a broader effort to optimize Kusama's economic parameters. A future proposal focused on inflation may be developed in collaboration with validators to ensure any changes to inflation include conditions for newly minted KSM that benefit both validators and the broader ecosystem.

As a Kusama community member, I believe this focused change represents a balanced approach that addresses immediate concerns while setting the stage for future improvements.


- **Problem Statement:** Adjusting the `ideal_bulk_proportion` parameter to set a more realistic target for coretime sales in the Kusama ecosystem.
- **Significance:** Preventing coretime prices from dropping to near-zero, stimulating demand for coretime and KSM, and maintaining profitability for validators.
- **Proposed Solution:** Change the `ideal_bulk_proportion` parameter from `100%` to `40%` to determine the sellout price of cores.
- **Expected Outcomes:** Discovering coretime's true value, supporting validator operations, and optimizing Kusama's economic parameters for future enhancements.

#512 Adjust (only) ideal bulk proportion

No Active Proposals