Aptos (APT) staking rewards could be slashed by nearly 50%: proposal

The proposal, submitted by a community member called MoonSheisty, aims at reducing reward yields from 7% to 3.79% in a three-month period

A proposal to slash Aptos (APT) staking rewards by nearly 50% has been submitted by a community member.

The proposal, which can be viewed here, aims at reducing reward yields from 7% to 3.79% in a three-month period, aligning Aptos staking rewards with other layer-1 blockchains and encouraging capital efficiency.

The proposal, titled "A Proposal to Modulate Aptos's Staking Rewards," has sparked some curiosity on X.

Early comments on the proposal on GitHub show some initial resistance.

A community member going by ElagabalxNode noted that reducing the staking reward without "compensatory mechanisms like a robust delegation program" could push smaller validators out of the network, thus weakening the Aptos blockchain's decentralization and long-term resistance.

The proposal also addresses the validators' role in the network, suggesting that Aptos should consider "a community validator program to give grants and stake to small validators who are making valuable contributions to the ecosystem."

Aptos, founded in 2021 by former Meta engineers, is a layer-1 blockchain with a focus on programmability, scalability and security. The network went live in March 2023 with a novel consensus mechanism called BlockChainPlus.

According to DefiLlama, the Aptos blockchain has a total value locked of $974 million as of April 18, with nearly $320 million coming from lending protocol Aries Markets.

While high staking rewards can incentivize users to lock up tokens on Aptos, they may also discourage participation in higher-risk, higher-reward opportunities within the ecosystem, such as restaking, DePIN infrastructure, MEV, and decentralized finance.

This aligns with the broader crypto community's interest in exploring new avenues for generating returns and contributing to the ecosystem.

Staking 'real reward rates' vary considerably

Staking rewards can vary significantly across blockchains. According to CoinLedger, real returns on the BNB Smart Chain are among the highest at 7.43%, while Cardano offers one of the lowest at just 0.55%.

Staking offers multiple benefits: It incentivizes users to lock their tokens on-chain, supports validators and helps secure the network. Rewards work similarly to interest earned on a savings account — but instead of cash, stakers earn crypto, which can fluctuate in fiat value.

From time to time, proposals emerge aiming to modify staking procedures. In June 2024, Polkadot introduced a proposal to reduce the time needed to unstake to just two days. In September, the Starknet community voted to pass a new staking mechanism, while Ethereum co-founder Vitalik Buterin proposed solutions to staking issues a few weeks later.

While staking gives the community a true "stake" in the network, there are risks associated with it, including the consolidation of smaller pools into larger ones. This trend can undermine decentralization and weaken the blockchain's overall resilience.

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