Recently, the Zilliqa network has decided to undertake one of the main steps toward developing what has been referred to as Zilliqa 2.0. Zilliqa has implemented halving to create this shift, which cuts the mining reward in half. The main purpose of this measure is to bring the structure of the network closer to the future Proof-of-Stake protocol and involve the community in the decision-making process.
Community-Driven Decision
The halving mechanism was adopted as part of the network’s decentralized approach to its functioning. The idea to have mining rewards slashed in half was initially brought up on the Zilliqa governance forum on September 24th, and people discussed what the changes could mean. Later, on September 28th, the proposal was put up for voting, and anyone holding gZIL tokens could vote.
The voting ended on October 12th; as it turned out, more than 97% of the overall voting capacity voted to deploy the halving mechanism. The high turnout and quorum achievement underscores the community’s passion and support for the network’s transformation to Zilliqa 2.0.
Aligning with Zilliqa 2.0 and PoS
Halving mining rewards is part of Its long-term plan to shift from Zilliqa 2.0, which replaces PoW for PoS. When mining starts to get less lucrative due to the halving mechanism, the Zilliqa network believes that the miners will either directly support PoS or participate in staking. They will continue to be rewarded for their services until the complete transition to Zilliqa 2.0. This transition strategy seeks to achieve stakeholder management by reducing the level of conflict despite the need to meet the interests of the various stakeholders involved.
Halving Mechanism
The block’s total mining rewards for October will be cut in half. As the mechanism is applied starting from October 14th, the rewards for the days preceding the new mechanism will be adjusted to an equivalent of 22.25% for the remaining part of October.
Half the rewards will be paid in November and then cut again to 25% of the original bounty amounts. The last decrease will be made in December to make the rewards equal to only 12.5% of their initial value.
With the lowered mining rewards, the platform will need a surplus of its ZIL token to be reinvested into the ecosystem to bolster network security and fund other community projects. This surplus may add more participants to the network’s validator list, engage in audits, and guarantee security.
Also, some excess ZIL tokens are set to fund investments, incentives, and development proposals. It also will help Zilliqa’s community and gZIL holders decide which further initiatives they consider essential by delegating the funding of those initiatives.
A Crucial Step for It’s Future
Zilliqa, through reducing PoW incentives, is creating the foundation for a smooth transition from PoW to a more efficient consensus model. Full involvement of the community in the governance process is a sign of a decentralized and transparent network.
More details are expected with the growth of the network on how the rest of the surplus ZIL will be used to create a positive impact and for Zilliqa to adapt to the ever-shifting nature of the blockchain industry.
