Aptos, the blockchain founded in 2021 by ex-Meta engineers, is currently considering a community proposal. This little known proposal could radically alter his administration’s staking reward structure. UGC community member MoonSheisty entered a treasury proposal to reduce staking rewards by an effective almost 50%. This ambitious step has sparked a contentious firestorm on the Aptos subreddit. The underpinning argument revolves around the need to align Aptos’ staking rewards to the rest of the Layer-1 blockchains and the need to foster capital efficiency.
As it stands, Aptos is providing a 7% staking reward. If implemented, the campaign’s proposal would lower this rate to 3.79% over a three-month period. This change is intended to make Aptos more competitive with other leading blockchains. For instance, Cardano has a staking reward rate of 0.55%, while BNB Smart Chain's is 7.43%.
Fast forward to April 18— the Aptos blockchain has reached a remarkable total value locked (TVL) of $974 million. Specifically, about $320 million of that total originates from the lending protocol Aries Markets. There have been worries that staking rewards could be cut after assembly. This legislative change would endanger the network’s decentralization and undermine the long-term viability of smaller validators.
Some community members worry that slashing staking rewards without implementing "compensatory mechanisms like a robust delegation program" could force smaller validators out of the network. ElagabalxNode, another community member, expressed that cutting rewards risks making the blockchain less decentralized and long-term resistant.
To address these concerns, many have proposed that Aptos should adopt a community validator program. This program will provide grants and stakes to smaller validators. As a result, it sets them up to be effective so they can play a meaningful role and improve the overall health of the ecosystem. The proposal answers the question of what validators should do in Aptos’ decentralized network.
