I’m currently writing this as I believe there is a fundamental misunderstanding between inflation and long term incentives.
YFI inflation should NOT be seen as a tool to provide long term network incentives. The YFI token has no inherent value beyond voting on proposals, hence it can be seen as an ownership token. Using inflation for incentives is just playing make-belief, by printing more tokens without value to trick people into participating.
Fees alone should be the source of long term network incentives, they are proof that the platform actually provides value to participants. If Yearn wants to be a useful platform rather than just a transaction mining scam, I think this approach is imperative.
If anything, I believe current emission should be greatly slowed down in order for more people to be able to gain access to YFI tokens. This way we can get many participants in governance. If emission is slowed down and YFI tokens become the exclusive source of voting, then early holders might be disproportionately powerful. This can either be seen as good, because they likely have a great interest in the network and it’s well-being, or as bad, because it will be harder for new members to achieve the same voting weight.
If emission is greatly slowed down, it might make sense to remove the hard cap, as we can then continuously provide tokens for new parties that are interested in participating in governance, without falling prey to transmining.