Based on current fee revenue, 0.22% of a 2 billion BTSX share supply would be burned yearly. At current prices, that is $1400 per year for each of the 101 delegates. Let's say the delegates are okay with that level of pay for now (they are actually okay with less currently since the average pay rate is 85%). In this case, all the fees would go to the delegates to pay for expenses. Now let's pretend one delegate wants to make a lot of money. If they put down x BTSX as the registration fee, and they get enough approval to become and stay an active delegate for a year, they could earn up to 312*x BTSX per year. Define p = 100 * x / (2 billion), the percentage of the share supply the delegate is willing to spend as a fee. Then the delegate can earn up to (3.12*p)% of the 2 billion BTSX share supply every year. Ignoring the small effects, such as 0.00217% of the delegate's earning being double counted and ignoring the increase in fees due to putting down the large delegate registration fee, it is fair to say that the inflation of the share supply is approximately (3.1*p)% per year (at least for the first few years) due to this delegate getting elected. So what does it take for this delegate to get elected? Well that is complicated to answer properly since the fact that this delegate will be inflating the share supply will likely reduce voter apathy and rally people to start voting for other delegates. But assuming no changes in voter behavior and the current delegate approval ratings, currently it only takes more than 5.25% of the stake to vote one delegate in. So, if a colluding group had s% of the stake, they could burn all but 5.25% of the stake to get their delegate in and inflate the BTSX supply by (3.1*(s-5.25))% per year (unless the shareholders reacted and raised the approval rating bar for delegates).
Under this proposal, a colluding group with 8.5% of the stake could (under current conditions) possibly inflate the BTSX supply by 10% per year and reap the rewards of that inflation. Even if the minimum delegate approval was 20%, a colluding group with 25% of the stake could still inflate the share supply by 15% per year. The only way to avoid the situation where a minority of shareholders are able to inflate the BTSX share supply against the wishes of the majority is if the minimum approval rating of a delegate is above 50%. Perhaps this proposal is smart as a way of killing voter apathy and getting shareholders involved for the sake of increasing delegate approval ratings and thus improving blockchain security, but I worry it could have the reverse effect where the minimum delegate approval rating stays low and a minority of stakeholders have the ability to dilute the shares against the wishes of the majority.
My view is that we should always require
at least 50% approval by the shareholders when determining the maximum rate of inflation of the BTSX supply. Under
the system I propose, which is delegate proposal ratified by shareholder vote, we can have different levels of shareholders approval needed to ratify the rules of a proposal depending on what rules the proposal intends to change. For example, we could require at least 50% shareholder approval to change the per block inflation rate cap. This cap would limit the effect of any other proposals so that ((amount of BTSX created to pay workers in a block) - (amount of BTSX allocated for destruction for that block))/(amount of BTSX in existence) is always less than or equal to (per block inflation rate cap). Then other proposals could have less strict requirements for ratification. For example, a proposal that changed the pay rate of the delegates or other workers (denominated in BitUSD) could only require approval by min(50%, max(delegate approval rating)) percent of shareholder vote, or maybe just a fixed percentage like 20%. You could even set up rules such as at least 15% of shares need to have voted AND the net approval, ((shares approving of proposal) - (shares disapproving of proposal)), would have to be larger than 15% * (100% - (percentage of shares voting)).