TechFlow news — Layer 1 blockchain Zilliqa has announced that staking rewards will begin to decrease starting January 16, 2024, in accordance with the staking reward reduction proposal formally approved through last year's governance vote.
The first reduction in staking rewards will occur on January 16, 2024, reducing the value of staking rewards by 34%.
On July 31, 2023, the community voted on a proposal to reduce monthly staking rewards, which passed with a majority exceeding the required quorum by 112%. The purpose of this adjustment is to bring the annual percentage rate (APR) for staking down to approximately 8% over a period of 15 months. This will be achieved by gradually reducing the network's total reward share allocated to SSNs (Sharded Security Nodes) from 40% to 25%, at a rate of 1% per month. Mining rewards are unaffected by this change, and the remaining ZIL tokens will stay within the unallocated ZIL pool. The reduction in staking rewards aligns Zilliqa’s reward mechanism more closely with industry-standard staking levels and will help balance the token burn and reward rates, ultimately achieving zero inflation for the network.
Below is an approximate breakdown of how the monthly reduction in staking rewards would impact the annual percentage rate (APR), assuming a fixed staked ZIL supply:
