The Aptos community is reviewing a new proposal, AIP-119, aimed at gradually reducing staking rewards. This initiative seeks to improve the network's economic model.
Overview of AIP-119
The proposal, submitted by community member Moon Shiesty, plans to reduce the annual staking reward by 1% each month for three months, eventually lowering it to around 3.79%. This change will be evaluated over a six-month period to gather community feedback.
Justification for Changes
According to the details shared, the current reward of approximately 7% is deemed excessively high, limiting capital efficiency and pushing participants towards higher-risk strategies. The proposal notes that a decrease in rewards could be offset by reducing inflation and developing alternative reward systems.
Support for Small Validators
The proposal also addresses the potential impact on small validators. AIP-119 suggests creating a community staking initiative to assist validators with less than 3 million APT and encourages the development of more sustainable, long-term incentive mechanisms.
The AIP-119 proposal has sparked active discussions within the Aptos community and may lead to significant changes in the network's economic model. A community review is expected over the next four weeks, followed by a mainnet vote.
