Aptos Proposes a Monthly Reduction of 1% in Staking Annual Yield Over the Next Three Months

In the latest post on X, Aptos revealed a proposal entitled ‘AIP-119’, which suggests a monthly reduction of 1% in staking annual yield

Aptos, the nascent layer-1 blockchain, is set for a substantial change as it navigates the early stages of its ecosystem development.

The focus has fallen on an upcoming Aptos integration proposal (AIP), no. 119, which proposes a monthly reduction of 1% in staking annual yield over the next three months, ultimately reaching approximately 3.79%.

The proposal, written by Moon Shiesty, plans to launch an initial attempt at restructuring the Aptos economic model. It is planned to be implemented over the next 6 months to gauge possible impact.

"im proposing @Aptos AIP-119 to reduce the staking reward rate by 3% over 3 months: from ~7% to 3.79% APR," Shiesty stated on X.

"the motivation for this change is simple; the current staking rate is too high. this change will bring aptos base staking rewards in-line with other layer-1 blockchains and capital efficient in the long-term."

According to the proposal, the current staking rewards of approximately 7% are lofty. It reduces capital efficiency, which ultimately forces the community to explore riskier or more costly options like restaking, DePIN infrastructure, MEV, and DeFi rewards.

"A new AIP from the Aptos community proposes adjusting Aptos staking rewards to better align incentives and support DeFi growth & participation," Aptos stated in the tweet.

The proposal, no. 119, plans to review the proposal over four weeks, with plans for a mainnet vote in the following week.

"This proposal aims to reduce the APY for APT baking to increase capital efficiency and reduce excessive inflationary rewards," the proposal stated.

If approved, AIP-119 could impact small validators, which plans to consider supporting validators with less than 3 million APT through a community staking program. It also plans to start discussions on more efficient long-term incentive methods.