Initia Foundation Ends Inflation Subsidy Plan Window

The Initia Foundation has announced the closure of the "Inflation Adjustment and Staking Withdrawal Subsidy Plan" time window, marking a significant milestone in its efforts to address inflationary issues within its ecosystem. According to the foundation, any staked positions that are unstaked after 14:00 on June 23rd will no longer be eligible for the subsidy. The distribution of the subsidy is scheduled to commence by July 7, 2025.

This development follows the foundation's earlier release of the "Inflation Adjustment and Staking Withdrawal Subsidy Plan" governance proposal. The primary objective of this proposal is to adjust the current annual 5% release rate of INIT's total supply to the originally designed annual staking supply rate of 5%, which equates to approximately 1.25% of the total supply per year. The need for this adjustment arose from an inflation rate misconfiguration that occurred since the genesis on April 24, leading to INIT's inflation being significantly higher than anticipated.

The foundation proposed a two-stage subsidy plan to compensate users for the staking yield loss affected by Proposal 39. The first stage, known as Type A Subsidy, targets users who initiated unstaking between May 20th and May 23rd and restaked before the proposal execution, estimated to be on June 2nd. These users will receive a subsidy for the unstaking period. The second stage, Type B Subsidy, applies to users whose unstaking period falls between June 2nd and June 23rd. These users will receive a subsidy equivalent to a new annualized APR of 25%, calculated based on the actual unstaking days.

This initiative by the Initia Foundation underscores its commitment to rectifying the inflationary issues and ensuring that users are adequately compensated for the disruptions caused by the misconfiguration. The distribution of the subsidy by July 7, 2025, provides a clear timeline for users to expect their compensation, fostering transparency and trust within the community. The foundation's proactive approach in addressing these challenges demonstrates its dedication to maintaining the integrity and stability of the INIT ecosystem.