Thanks for sharing your opinion.
When I was writing the example I just wanted to explain the behavior of the EMA. After posting it I realized that having a one day time step in that example could be misleading so I changed it.
I don’t think that having a short time step could be helpful. An attacker who managed to buy billions of ALGOs could hold them for a few days too. On the other hand, if we require holding ALGOs for several years that could have some benefits:
- If an exchange acquires more than 1/3 of all ALGOs, The community have enough time to react before that exchange’s stake reaches the dangerous 1/3 level.
- If a multi billionaire decides to attack the agreement protocol by buying ALGOs he will have to hold them for years before attacking. This would be costly and require planning.
Currently, we have no rewards in Algorand!
What you might think is a reward is just a change in the unit of currency. The currency is inflating in some rate and all users balances inflate with the exact same rate. No one is getting anything!
So if you want to give people real money by minting (inflating) the currency, you must exclude some users from receiving the rewards. For example in bitcoin only the new block proposer gets the newly created bitcoins, not all users.
I think a good way for reward distribution is to reward the long time holders more than new comers. The holders of a cryptocurrency are helping the growth of the ecosystem while they are exposed to several types of risks. (protocol attacks, hacks, price crashes, …)
It should be noted that this will not encourage low liquidity because the EMA will not react to temporary changes of a user balance. In other words if you spend 1000 ALGOS today and then you transfer 1000 ALGOs back to your account one week later, the EMA will notice almost nothing and you won’t lose anything.