Aptos is thinking about shaking things up. Not a full-blown revolution, mind you, but a tweak to the rewards system for those who stake their tokens. The idea, put forward in a proposal called AIP-119, is to gradually lower the staking rewards from around 7% to a more modest 3.79% over the next three months. Why? To nudge people towards actually *doing* things with their tokens, instead of just letting them sit there earning a passive income.
- Aptos is considering lowering staking rewards to encourage more active participation in the ecosystem beyond simply holding tokens.
- The proposal, AIP-119, aims to reduce rewards from approximately 7% to 3.79% over three months to incentivize activities like restaking and DePIN.
- Concerns exist that lower rewards could negatively impact smaller validators, potentially leading to less decentralization within the Aptos network.
Sherry Xiao, a production engineering head at Aptos Labs, and a developer known as Moon Shiesty teamed up on this one. They argue that lower staking rewards will encourage folks to explore more complex – and potentially more lucrative – opportunities. Think restaking, building out decentralized physical infrastructure (DePIN), or even diving into the world of Maximal Extractable Value (MEV). It’s a bit like saying, “Hey, you can get a guaranteed 3.79%, or you can take a risk and maybe earn a whole lot more.”
Currently, Aptos offers a staking yield that’s pretty competitive, sitting at around 7% according to Ultrasound.money. That’s higher than Ethereum’s 3.1%, but lower than Cosmos’s 15% for ATOM stakers. It’s also in the same ballpark as Avalanche, offering 7.6% to AVAX stakers. But the Aptos team isn’t just focused on being competitive; they want to foster a more active and diverse ecosystem. It’s a fair point. Staking is great, but a blockchain needs builders, too.
The Small Validator Problem
Of course, any change like this isn’t without its potential downsides. The authors acknowledge that reducing rewards could squeeze smaller validators, those who run the network and verify transactions. One validator node operator pointed out that a drop in inflation, without some kind of support system, could effectively force smaller players out. That’s not ideal, as it could lead to less decentralization – the very thing blockchains are supposed to be good at.
Moon Shiesty suggests a solution: a stake delegation program, similar to one Solana has. The idea is to match stakes, helping smaller validators stay afloat. Shiesty also hopes to see more validators explore alternative revenue streams, like running RPC nodes (which provide data to the blockchain), participating in MEV auctions, or offering indexing services. Basically, finding ways to earn money beyond just staking. Xiao agrees, suggesting the Aptos Foundation review its current stake delegations and maybe give a nudge to validators who aren’t actively contributing.
It’s a bit like a garden. You can’t just plant seeds and expect everything to grow. You need to tend to the plants, prune the dead branches, and make sure everyone gets enough sunlight. In this case, the “plants” are the validators, and the “sunlight” is a sustainable revenue model.
Solana’s Stumble
This isn’t the first time someone has tried to tweak staking rewards to encourage more activity. Just recently, a similar proposal on Solana – SIMD-228 – was voted down. The Solana proposal aimed to make inflation dynamic, tied to staking participation. Critics worried it would also hurt smaller validators. The argument echoes across both networks: high fixed costs for running validators, combined with lower rewards, can make it tough for the little guys to compete.
Shiesty points out a key difference: “SIMD-228 was intended to stabilize inflation. This AIP is intended to reduce staking rewards.” He also notes that Aptos’s staking rate has been relatively stable so far, so stabilizing inflation isn’t a pressing concern right now. It’s a subtle but important distinction. Aptos is focusing on incentivizing activity, not necessarily fixing a perceived problem with inflation.
The authors of AIP-119 plan to gather feedback for four weeks before putting the proposal to a vote. Shiesty seems optimistic, saying the proposal already has a lot of community support. Whether it passes remains to be seen, but one thing is clear: Aptos is willing to experiment to find the right balance between staking rewards, network activity, and decentralization. It’s a tricky balancing act, but one that could shape the future of the blockchain.
