The Aptos community is engaged in a heated debate over the AIP-119 governance proposal, which calls for reducing staking rewards from the current 7% to approximately 3,79% over the next three months.
The proposal, driven by Sherry Xiao, senior engineer at Aptos Labs, and Moon Shiesty, lead developer, seeks to incentivize greater innovation and economic activity on the network beyond passive staking.
The authors argue that the current yield rate is too high and encourages inefficient capital allocation, so a reduction would encourage more active strategies such as restaking, MEV mining, and participation in DeFi. However, this measure has raised concerns among small validators, who could be displaced due to the decrease in revenue, jeopardizing the decentralization and robustness of the blockchain network.
OPERATE WITH APTOS (APT) HERETo mitigate these effects, the proposal includes a delegation program that would support validators with lower stakes, in addition to allocating reward savings to liquidity incentives and gas fee subsidies, particularly benefiting emerging stablecoin projects on Aptos. The community has a feedback period before the final vote on this proposal, while the future of staking on Aptos is redefined amid this crucial debate.
The AIP-119 proposal: Reducing staking rewards
The proposal AIP-119, driven by prominent members of Aptos Labs, has proposed a progressive decrease in the rewards granted to staking participants, with the primary intention of incentivizing users to explore higher-yield opportunities within the ecosystem.
Currently, staking rewards on Aptos are around 7%, a figure higher than that of Ethereum, which remains around 3,1%, but lower than the 15% offered by Cosmos. The idea, according to the authors of the proposal, is not only to reduce inflation but foster a more dynamic economy where users seek more profitable alternatives than simple staking, which they consider a risk-free form of return. This transition aims to reorient incentives toward activities that actively contribute to the development and growth of the network.
PREPARE YOUR WALLET HEREHowever, the aforementioned proposal acknowledges that this reduction could directly affect the profitability of the network's smallest validators, who rely heavily on these rewards to maintain their operations. Therefore, the proposal has raised alarms about the risk of losing diversity on the Aptos network.
The impact on small validators and the decentralized network
Reducing staking rewards without compensatory mechanisms could have profound effects on the infrastructure that supports Aptos. Small validators, who often operate on tight margins due to fewer resources, could be unable to cover their operating costs, potentially forcing them to leave the network. According to experts, this situation threatens decentralization, a key principle for the security and resilience of any blockchain.
In the proposal, Moon Shiesty emphasized the importance of launching stake delegation programs that incorporate matching models similar to those used on Solana, in order to support these at-risk validators. Furthermore, he encourages validators to explore other revenue streams, such as RPC service providers, MEV, bundling, or indexing, to offset the decline in issuance rewards.
On the other hand, Sherry Xiao has suggested that the Aptos Foundation actively review existing delegations, removing validators who do not actively contribute to the network. With this measure, the network could rebalance staking toward more committed participants, aligning incentives to strengthen the platform's sustainable growth.
Certificate
Blockchain Course
Basic levelTake this course where we explain blockchain in a clear, simple and concise way so that you have a very clear idea of what this new technology consists of.
Fostering innovation and exploring new opportunities in Aptos
Despite the challenges for small validators, the reward reduction is also seen as an opportunity to foster innovation within Aptos. By incentivizing stakers to pursue higher-risk options, it promotes the exploration of new avenues for yield that drive the network's technological and economic development.
For example, restaking allows assets locked up to secure the network to be reused to secure other protocols or services, thus multiplying validators' revenue streams. Furthermore, the DePIN infrastructure, which involves decentralized infrastructure projects, also offers alternatives to diversify revenue and make the network more robust and functional.
OPERATE WITH APTOS (APT) ON BIT2METhis approach invites the community to go beyond the mere passive perception of staking rewards Now engage in dynamic and active models, which, in addition to generating higher returns, can strengthen the network in the long term. Thus, although the reduction seems like an initial limitation, it also represents a strategy for building a more innovative, competitive, and resilient ecosystem.
Comparison with Solana's failed proposal
The debate on Aptos is not an isolated phenomenon. In March 2025, a similar initiative, known as SIMD-228, was rejected on Solana in one of the most important votes in the network's history. The proposal sought to replace the fixed inflation rate with a dynamic model tied to staking participation, with the intention of controlling inflation and improving the network's sustainability.
However, critics argued that such a measure could lead to the expulsion of smaller validators, creating a risk of centralization, an argument now echoed in Aptos with the AIP-119 proposal. Both blockchains share the characteristic of having complex architectures that impose high fixed costs for operating validator nodes, increasing the vulnerability of less-resourced operators.
While Solana sought to stabilize inflation, the Aptos proposal aims for a direct reward reduction to motivate changes in asset usage. AIP-119 leaders acknowledge that the Aptos staking rate has been stable and consider stabilizing inflation not an immediate priority, thus differentiating their strategy from Solana's proposal.
GO TO BIT2ME LIFEHowever, the Solana experience offers valuable lessons about the risks and resistance these reforms face and underscores the need to accompany changes with effective mechanisms that preserve the diversity and health of the blockchain ecosystem and its participants.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
