- Buterin’s latest proposal seeks to up the annual return rate for validating transactions
- Several members of the Ethereum community are in support of the proposal
Vitalik Buterin, the co-founder of the Ethereum (Ether) distributed ledger technology project has proposed a higher staking reward for transaction validators on the network once the proof-of-stake (PoS) algorithm implementation goes live, according to a GitHub post on April 20, 2019.
Ethereum Set to Introduce Higher Staking Rewards
According to a post by Vitalik Buterin on GitHub, the co-founder of the Ethereum project wants the network to increase the staking reward for stakers and transaction validators in the upcoming proof-of-stake (PoS) algorithm implementation.
“An issuance increase is proposed based on community feedback, to 2**21 ETH if 2**27 ETH is validating, along with an agreement to set the base reward quotient based on a pre-set max issuance bound once all protocol details are finalized,” stated Buterin.
As stated in Buterin’s proposal, when 134, 217, 728, ether is staked or used to validate transactions, 2,097,152 ether will be issued per year, giving stakers an annual return of 1.56 percent.
Community Members in Support
Importantly, key members of the Ethereum development community including researcher, Justin Drake, noted that the proposal is reasonable, as a successful implementation would increase the security of the network. In his words:
“Targeting 2^25 ETH at stake (approximately 32m ETH) for the long term feels about right for strong security. In such conditions, the base inflation would be roughly 1 percent and the base return ~ 3.2%.”
Drake also added an increment in staking rewards will significantly reduce the inflation rate of the network.
“Assuming each shard consumes on average 1,000 ETH in gas per year (about 100x less than what Eth1 consumes today), with half of the gas burnt, then inflation would be ~0.5 percent and the validator return ~5 percent. Feels healthy!”
While Ethereum remains one of the most robust blockchain networks in existence, the team have been working round the clock to come up with the best possible solution to the scalability problem of its distributed ledger.
As reported by Blockchain Reporter earlier in April 2019, the Ethereum team successfully launched its proof-of-stake consensus in testnet.
At press time price of ether (ETH) has increased by 1.95 percent, with a market capitalization of $18.18 billion.