A new governance proposal for the Layer 1 blockchain Aptos would reduce staking rewards from about 7% to 3.79% over three months, aiming to incentivize more active development on the network.
The proposal, AIP-119, was co-authored by Sherry Xiao, head of production engineering at Aptos Labs — the team behind the blockchain — and developer Moon Shiesty, who is working on the Aptos- and Movement-based protocol Mirage.
“Lower staking rewards encourage participants to seek out opportunities that have associated costs or risks but earn more rewards than the ‘risk-free’ staking rate,” the AIP-119 proposal states, identifying restaking, DePIN infrastructure, and MEV as possible opportunities.
Aptos’ current staking yield of around 7% is higher than Ethereum’s 3.1%, according to Ultrasound.money, but lower than the roughly 15% offered on Cosmos for ATOM stakers. It’s also close to the 7.6% yield offered to Avalanche’s AVAX stakers.
The authors acknowledged that reducing staking rewards could impact the profitability of smaller validators.
“A reduction in inflation, without compensatory mechanisms like a robust delegation program, could effectively push smaller operators out of the network—undermining decentralization and long-term resilience,” one validator node operator wrote in response to the proposal.
“I would like to see Aptos Foundation launch a stake delegation program with a stake matching model based the Solana delegation program to support small validators losing revenue from this AIP,” Shiesty told The Block. “I also hope to see more Aptos validators pick up alternative revenue models to make up for lost revenue: RPC, MEV, bundles, indexing…These ‘real’ sources of staking yield are better for an ecosystem than staking yield through emissions.”
Xiao also suggested the Aptos Foundation review its current stake delegations and remove validators who are not actively contributing to the network.
“Rebalancing stake toward more active and engaged participants would better align incentives with our goal of supporting the long-term growth of the network,” Xiao wrote.
Solana validators nixed similar anti-inflation effort
The Aptos proposal comes shortly after a similar measure — SIMD-228 — was voted down by validators in March in the largest vote in the network’s history. That proposal would have replaced Solana’s fixed inflation rate with a dynamic model tied to staking participation.
Critics of SIMD-228 said the change could drive out smaller validators, threatening decentralization — an argument echoed in the Aptos debate. Both networks have high fixed costs for running validators due to the complexity of their architectures.
“SIMD-228 was intended to stabilize inflation. This AIP is intended to reduce staking rewards,” Shiesty noted. “The staking rate so far has been relatively stable on Aptos, so I dont think stabilizing inflation is a high short-term priority.”
The authors of AIP-119 said they plan to gather community feedback for four weeks before submitting the proposal to mainnet.
“This proposal in particular, based on feedback so far, seems to have a lot of community support,” Shiesty said.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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