DFINITY Foundation releases ICP white paper: inflation cuts 70%, maximum staking lock-up period reduced to 2 years

DFINITY releases the “Mission 70” ICP white paper, aiming to reduce inflation by 70% by the end of 2026. Staking periods are shortened from 8 years to 2 years, the 13%+ APY is canceled, with short-term yields at least 2-3%. Inflation drops from 9.72% to 5.42%, requiring an additional 26% demand. Cloud engine challenges AWS, targeting a $2 trillion market.

Mission 70’s Deflation Plan and 70% Reduction Path

(Source: DFINITY Foundation)

The DFINITY Foundation has published a new ICP white paper titled “Mission 70,” authored by its founder Dominic Williams. The document outlines a strategic plan aimed at expanding the Internet Computer economy and promoting its widespread application. Key contents of the ICP white paper include proposals to reduce inflation and support long-term sustainable economic transformation, emphasizing the importance of increasing the network’s practical application value to foster ecosystem development.

The core goal of Mission 70 is to reduce ICP inflation by at least 70% before the end of 2026. The implementation path involves supply-side reduction of ICP minting and demand-side increase in ICP burning. Overall impact estimates show that supply-side measures will decrease ICP minting rate from 9.72% (January 2026) to 5.42% (January 2027), a absolute reduction of 4.30 percentage points, and a relative reduction of 44%.

Contributions are broken down into voting rewards decreasing from 5.88% to 3.45% (-41%), node rewards decreasing from 3.84% to 1.97% (-49%). Achieving Mission 70 requires an additional 26% demand impact, which involves increasing the cycle burn rate from the current 0.05 XDR/sec to 0.77 XDR/sec. This target of 0.77 XDR/sec is not arbitrary; historical data shows that in 2025, the rate exceeded this threshold for several months, demonstrating feasibility.

Three Pillars of Mission 70’s Deflation Plan

Supply Reduction 44%: Voting rewards down 41% + node rewards down 49% to halve minting rate

Demand Increase 26%: Cycle burn rate from 0.05 to 0.77 XDR/sec, driven by cloud engine

Ultimate Goal: Reduce inflation from 9.72% to 2.92%, approaching deflation

The DFINITY ICP white paper emphasizes that even if demand acceleration measures alone can achieve Mission 70, active supply-side measures remain crucial. Reasons include long-term sustainability, inflation predictability, maintaining risk-reward balance to attract stakers, and the necessity for the network to transition from early startup to mature operation.

Market Norms for Reducing Staking from 8 Years to 2 Years

DFINITY believes the old ICP staking scheme is far from market norms. Most mainstream tokens have fully liquid staking or staking less than 1 week, and no other tokens offer lock-up periods exceeding 1 year. Therefore, the white paper proposes reforms to NNS staking rewards: the maximum lock-up period reduced from 8 years to 2 years, the minimum lock-up from 6 months to 2 weeks, canceling the overlong lock-up APY of over 13%, and allowing short-term lock-up staking to generate at least 2-3% APY.

The logic behind this reform is to reduce liquidity risk. An 8-year lock-up is too extreme for most investors, meaning funds are completely inaccessible during the entire period. While such design may help stabilize supply early on, it becomes a hindrance as the project matures, deterring institutional investors and risk-averse users. Reducing to 2 years aligns ICP staking conditions with mainstream projects like Ethereum and Cardano, lowering participation barriers.

Adopting a convex reward curve is another highlight of the reform. The new formula f(x) = ax² + 1 uses a quadratic equation, increasing the maximum delay bonus from 2x to 3x. The effect is that short-term stakers receive moderate rewards, while long-term commitments get significantly higher incentives. The new APY levels (without age bonus) are 2.3% for 2 weeks, 3.5% for 1 year, and 7.0% for 2 years. This design reduces the maximum lock-up period while maintaining incentives for long-term staking through a steeper reward curve.

Adjusting the maturity to ICP calculation, incentivizing “HODL in bear markets, sell in bull markets,” is another clever design. The new proposed mechanism is based on price levels rather than price changes, comparing the 7-day moving average to the 365-day moving average with asymmetric global bounds of -10% and +2%. The idea is to strongly prevent minting during market stress, allowing only limited positive adjustments under favorable conditions. This mechanism enables stakers to receive more ICP during bear markets (when prices are low) and fewer during bull markets (when prices are high), encouraging long-term holding rather than short-term speculation.

Cloud Engine’s $2 Trillion Ambition to Challenge AWS

The ultimate ambition of the DFINITY ICP white paper is to challenge the traditional cloud market through Cloud Engines. Cloud Engines are configurable application-specific execution environments, allowing enterprises to deploy workloads with customizable security, performance, and resilience, while retaining decentralization, on-chain tamper-proofing, verifiability, and fault tolerance. The economic model draws inspiration from the ISP boom of the 1990s, where node providers can invest in hardware and sell Cloud Engine functionalities, with revenue shared as node providers earn all income minus 20% used to buy and burn ICP.

The market potential is enormous. The global cloud market is about $1 trillion in 2025, projected to exceed $2 trillion by 2030. Infrastructure and platform services (like AWS) account for roughly $400 billion. DFINITY’s target market encompasses the entire cloud market, realized through self-written cloud solutions. Competitive advantages include tamper-proof, unstoppable sovereign cloud platforms, serverless architecture, unique security features, and mathematically secure resilient network protocols.

Caffeine.ai and self-written cloud are key tools to realize this vision. Caffeine.ai is an AI-native application layer, enabling users to create applications via natural language chat and documents, with automatic code generation, deployment, and iteration, fully abstracting traditional software development workflows. The market opportunity lies in unprecedented application development speed and cost savings, unlocking new application categories such as hyper-localized social media.

The strategic vision is for Internet Computer to become the ultimate platform for self-written cloud, driving massive ICP burn, with the long-term goal of pushing ICP into a strongly deflationary state. When cloud engines are widely adopted, enterprise payments for compute, storage, and bandwidth will require burning ICP, creating continuous deflationary pressure that will shift ICP from inflation to deflation, fundamentally changing the tokenomics.