Proactive inflation

At the moment it seems expansion cycles work in eventually creating enough sell pressure. But debt cycles have issues. What if we start the whole expansion cycle while the price is still below peg and this way give it a positive spin?

So basically it would go like this:

  • When the price is under peg, ESD bonded to the DAO earns coupons each epoch.
  • When the price is above peg, coupons redeem automatically to ESD
    (Not all at once. Each epoch your currently oldest coupons are redeemed; oldest of each individual account not on a first bonded first served basis.)
  • Redeemed ESD is not locked and can be sold immediately.
  • Coupons only redeem when you stay bonded. If you choose to unbond, all your unredeemed coupons are burned. But given how much price rises above peg, this might still be the more profitable choice for you.
  • Additional supply will come when people no longer have coupons to redeem (or chose to burn) and unbond

And what this might achieve:

  • Remove loss aversion from potentially expiring coupons
  • Remove bot and other issues with coupon redemption
  • Give negative peg cycles a positive spin
  • Encourage supply reduction by bonding
  • Encourage buy pressure for a chance of earning coupons
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“ESD bonded to the DAO earns coupons”
Can you explain this? Currently the reward mechanism is in from of ESD. So new reward mechanism no longer gives ESD, but gives Coupons or burn those ESDs into coupons before distributing ?

“Redeemed ESD is not locked”
I’m Confused again, What is “redeemed ESD” ? The ESD from the redeemed coupon from above? But then why not just give out ESD like the status quo?

Even though I don’t understand the details of the proposal. The general idea about “proactive inflation”. Seem equivalent to just setting the price target in the current protocol at a number below 1.00. Is this correct?