Treasury fraction of distributed rewards not accurately described in monetary policy about cardano-documentation HOT 5 CLOSED

Hi Trevor, thanks for your work.
This issue was discussed here https://forum.cardano.org/t/double-treasury-taxation-of-40-and-possible-workarounds/41461 on the end of 2020.
The discussion generated a proposal, through a pre-CIP, to decrease rewards that flow to Treasury to an effective 20% on distributed rewards instead of the whole reward pot, but due to the lack of interest among both IOG and the Cardano community it was finally retired. The result is that around 40% of the reserve will sooner or later flow into the Treasury.

https://github.com/cardano-foundation/CIPs/pull/35/files

from cardano-documentation.

Hey @feqifei, thank you for the initial work and PDF. I'm familiar with the CIP (ie. PR #35). Without commitment to fix the issue you brought up I'm now hoping for a minimum of documentation clarification.

However, I'd also like to suggest reconsidering opening the CIP and seeing if we can gain consensus on the changes. I believe I actually recall when this was originally worked on, the part of the community I recall debating the fix was catalyst participants who felt they didn't want the treasuries cut adjusted, although I did not agree with this viewpoint. I don't recall if others at the time voiced similar opinions, but I may have missed Twitter or other threads of discussion.

I feel the research that went into the p and t parameters should not be in vain. I don't feel accepting the resulting extra treasury funds due to inefficiencies should be the path forward, even if some disagree. If the CIP is not reopened I definitely invite your view of how this could be easily described in the documentation. I read your PDF and the forum threads, again, yesterday before opening the ticket. I was going to take another pass today before coming up with a suggested change for the docs. I suspect with your efforts and deep knowledge of the topic you may have a very succinct idea of what should change. However I will definitely advocate for the CIP if you are willing to reopen it for discussion, as I personally support it and wish I had been vocal in the past at trying to gather more support for it.

Thanks

from cardano-documentation.

Hi Trevor, the lesson my friends and I have learnt at that time is that it's a lost battle trying to change the protocol behavior if the people/organizations that have the power of taking the decision are the same that benefit of the current situation.
And I don't mean that those people/organizations are acting with bad intentions, not at all.
The thing is that I come from a country where government taxation rate on people and businesses is around 50% overall and those funds are so bad managed.
Watching at the Treasury taking almost 40% of Cardano reserves, officially for the "common good" of the community, is something that is hard to agree on from my viewpoint.
Moreover, most of community members think that only 20% go to the Treasury because there is no clarity at all.
Anyway, and I speak for myself only, after that experience I prefer not to be involved again in a process that at that time wasted several days and energy.
Maybe thank to CIP-1694 something could change in the future.
I think that your request of just more clarity in the official documentation is fair and maybe achievable and I'll fully support you

from cardano-documentation.

Hello @TrevorBenson & @feqifei ! Thank you for raising this issue, we'll address it to update the documentation.

from cardano-documentation.

We discussed this issue with Kevin Hammond, IOG's Head of Software Engineering. The treasury rate explanation has been updated to explain the observed difference in percentage.
If calculating actual rewards rather than the monetary expansion, you might get a higher percentage (up to 30%). Also, it's important to note that the rewards given to stake pools may be reduced under certain conditions, such as when pools are not saturated, not fully pledged, or fail to produce their allocated blocks. Any unclaimed rewards remain in the reserves for future allocation. This clarifies the observed difference.

from cardano-documentation.