Zilliqa will reduce staking rewards on January 16th to reduce inflation

According to official news, according to the governance proposal voted by the Zilliqa community last year, its staking rewards will be reduced for the first time on January 16, 2024. Staking rewards are earned by Staked Seed Nodes (SSN), and ZIL holders can entrust the ZIL in their wallets to SSN operators, who return staking rewards to holders after charging a small commission. The staking rewards currently offered by Zilliqa exhibit inflationary characteristics, meaning that without intervention, the Zilliqa network will eventually exhaust its supply of ZIL for mining and staking rewards. On July 31, 2023, the community voted to adopt a proposal to reduce staking rewards every month to reduce the staking APR to approximately 8% within 15 months. This is achieved by reducing the share of total rewards SSN receives in the network from 40% to 25% at a rate of 1% per month. At the current pace, the 25% target will be reached by October 2024. Mining rewards are not affected by this change and remaining ZIL will remain in the unallocated ZIL pool. The reduction in staking rewards brings Zilliqa’s reward mechanism closer to industry standard levels and helps balance burn and reward rates, ultimately achieving zero inflation on the network.