Fantom (FTM) has submitted a voting proposal to the community to reduce the rewards for validators on the network. Network validator rewards are expected to be reduced by 50% if the vote is accepted by the community.
As with almost every blockchain network, validators are needed to verify transactions in the Fatntom network. In return for these verification processes, users who perform the transaction are given a certain amount of the local coin of that network as a reward. For Fantom, this mechanism counts users who have staked 50,000 FTM on the network as validator and allows them to earn a 13% reward as a one-year return on stake. These rewards are derived from transaction fees paid on the network, and stake rewards are planned to be distributed by 2024.
The new proposal submitted to the community vote by the phantom developers proposes to reduce this reward rate from 13%. The current 13% reward rate is much higher than competing networks and needs to be reduced, according to Sam Harcourt, a lead member of the Phantom team. Besides, data from FTMScan shows a 120,000% increase in validators' earnings between January 2021 and January 2022.
According to Harcourt's proposal, FTM emissions could be extended beyond 2024 by reducing the reward rate for validators. The proposal submitted to the community's vote consists of 5 different options: The first 4 proposals are based on reducing the rewards for validators to around 3% to 6%, thereby extending FTM emissions to 4 to 9 years. The 5th option offered in the voting allows the 13% reward rate to be maintained without disturbing the current order.
This voting, which was presented to the community, started on last Monday and it is known that it will continue until February 4, 2023, unless a common decision is made by 67%. Voting may end on 15 August if a 67% consensus is reached before the stated date. Currently, 2% of the community has voted, and the results from these votes show that 99% are in favor of reducing the rewards to network validators to 6%.