Fantom Foundation proposes to lower the stake rewards for validators of the network. This move could extend the timeline for FTM token emission beyond 2024.
Fantom is currently voting on a governance proposition, which seeks to lower the rewards paid network validators.
Fantom users get rewards for staked FTM, the blockchain’s native asset. With 50,000 staked FTM, users can run validator nodes on the network to process transactions and earn rewards. Fantom’s current staking reward for staked tokens is 13% with a 1-year vesting period. These rewards come from transaction charges paid on the network. They are expected to be distributed until 2024.
Fantom proposes lowering the 13% stake reward rate to make it more comparable with the market average. Sam Harcourt, Fantom Foundation’s business development director, stated that Fantom’s rate was higher than those of other Layer 1 networks such as Ethereum, Solana and Avalanche (BNB).
In addition, the proposal argued for lowering the rate due to the increased volume of Fantom stake rewards for validators. Data from FTMScan indicates that validators earned 120,000% more between January 2021 & January 2022.
Harcourt’s proposal to reduce the reward rate for validators could increase FTM emissions beyond 2024. Five voting options are available. Four of them offer reduced rates, ranging from 3% to 6%. These rates will increase FTM emissions by four to nine years (2026 – 2031). You can also vote to keep the reward rate unchanged, which will result in Fantom emissions ending in 2024.
The vote on the proposal opened Monday and will continue until February 4, 2023. If the polls reach 67% quorum, the vote could end on August 15. At the time of publication, the quorum is at 1.8%. The voting page data shows that 99% of voters support a 6% stake reward rate on this network. If this reward rate is chosen, Fantom emissions can continue for four more years.