1053

This proposal ends OSMO inflationary emissions. The mint module stops issuing new OSMO: staking rewards from issuance and the community pool allocation end, and staking rewards come entirely from protocol revenue. The daily developer vesting release, which runs through the same mechanism, pauses with it.

Background

OSMO issuance has been cut in stages through [Hidden link] and [Hidden link], reducing the staking subsidy in two steps to below the taker fee burn rate. Most of each day's issuance is now redirected to the community pool as a soft burn.

OSMO is already deflationary: the OSMO burned from taker fees and ProtoRev revenue over the last year outpaces the OSMO issued into circulating supply. Today the mint module still distributes about 121,766 OSMO per day, but most of it never enters circulating supply:

Only the staking rewards and the developer vesting release, about 40,000 OSMO per day, enter circulating supply. The staking share adds about 2 percentage points to staking APR. The developer vesting release unlocks pre-minted OSMO to the developer address set by [Hidden link], where it has remained untouched since December 2025. The community pool share does not circulate; it accumulates a balance that governance must manage.

Rationale

• Full revenue reliance. Staking rewards are already largely funded by protocol revenue: taker fees and transaction fees. Ending emissions completes the move to a staking yield made entirely of revenue.
• Every burn reduces supply. With no new issuance, all OSMO burned from taker fees and ProtoRev revenue directly reduces supply.
• No more soft burn. Redirecting issuance to the community pool keeps OSMO out of circulation but still creates it. Ending issuance at the source removes the need for it.

Proposed Change

• Set the mint parameter minting_rewards_distribution_start_epoch to 100,000,000. The mint module does not mint before this epoch, and in practice it is never reached at the rate of one epoch per day.
• Set the mint distribution_proportions to 100% community pool (staking, pool incentives and developer rewards to 0), so the chain's inflation query and staking APR calculations report zero.

The epoch_provisions value stored by the mint module is left unchanged. Queries of it will continue to show about 121,766 OSMO per day, but nothing is minted.

Impact

• No OSMO is minted or released from the first daily epoch after passage.
• Stakers continue to receive their share of taker fees and transaction fees. The roughly 2% APR from issuance ends. This is mostly replaced by the 1.7% additional estimated APR from the increased share of taker fees in [Hidden link].
• Developer vesting: the daily release pauses. The remaining balance, about 51.9 million OSMO, was minted at genesis rather than issued, and stays in the developer vesting module account. Any future release would require a separate governance decision.
• Community pool: no longer receives newly minted OSMO.

Forum Post: [Hidden link]