Web3 Foundation's Jonas Gehrlein has published a proposal for adjusting Polkadot's inflation system on the Polkadot Forum.
He suggests simplifying the model by removing the ideal staking mechanism which has become largely redundant with the introduction of Agile Coretime and revenue burning.
He proposes a simple mechanism with APY increasing with a lower staking rate and vice-versa, and a fixed treasury inflow.
These adjustments will be possible after new mechanisms are deployed in the next runtime upgrade.
As an example he showed how inflation can be reduced to 8%, which would give a Staking APY of 11.62% at the current staking rate, with a treasury inflow of 1,155,529 DOT (fixed at 15% of inflation).
The community is invited to get involved in the discussion and come to a general consensus so that an appropriate OpenGov referendum can be proposed after the runtime upgrade.