Hi Everyone, Daemon published this proposed SIP to increase the block reward for STX miners. I wanted to also put it here on the forum for visibility, further discussion, and for those in the community who don’t use or go to Github as much. Link to the actual PR on Github is here.
SIP Number: 019
Title: Modify Coinbase Reward per Block & Halving Schedule
Author: Xan Ditkoff (email: [email protected])
Consideration: Technical, Governance, Economics
Created: 16 May 2022
There are currently two ways the Stacks network rewards STX miners when they win a block: STX tokens as part of a “Coinbase reward” and STX tokens from transaction fees. The purpose of the Coinbase reward is to bootstrap and to provide an extra incentive for miners to secure the network in the early days, when transaction fees are not yet sufficient.
For the first 10,000 blocks of the Stacks mainnet launch the coinbase reward was 2000 STX compared with 1000 STX today. This period coincided with significant interest from users and miners. Historically, the year 2050 STX supply has been reduced in the past (from 5B to 2B to 1.8B). This proposal calls for a slight increase in the year 2050 supply, and increasing the current coinbase reward to 1600 STX until the next halving.
This SIP is made available under the terms of the Creative Commons CC0 1.0 Universal license, available at Creative Commons — CC0 1.0 Universal This SIP’s copyright is held by the Stacks Open Internet Foundation.
Open membership blockchain based networks need to provide an economic incentive for miners to process transactions and provide security. Coinbase rewards are typically used to bootstrap this economic incentive in the early days of an open source network when transaction fees alone will not provide a sufficient incentive. Currently, the coinbase reward for the Stacks network is 1000 STX per block, with a halving schedule as follows:
For the first ten thousand blocks of Stacks 2.0, however, the coinbase reward was inflated to 2000 STX per block, and resulted in much more favorable STX mining and Stacking conditions. Since the purpose of a coinbase reward is to bootstrap the network in the early days, we propose increasing the coinbase reward and subsequently modifying the halving schedule.
This SIP proposes a change to the current STX coinbase reward, and therefore also a subsequent change to the halving schedule for the STX coinbase reward. The changes are as follows:
Change the current coinbase reward to 1600 STX per block. This change will remain in effect until the next halving for the Stacks network, which will occur roughly two years from the time of writing this draft.
The current halving schedule for coinbase reward amounts are:
- 1000 STX per block are released in the first 4 years of mining
- 500 STX per block are released during the following 4 years
- 250 STX per block are released during the following 4 years
- 125 STX per block are released from then on indefinitely.
This proposal would modify the schedule to the following:
- 1600 STX per block are released from SIP acceptance until first halving (~2 years)
- 800 STX per block are released during the following 4 years
- 400 STX per block are released during the following 4 years
- 200 STX per block are released during the following 4 years
- 100 STX per block are released from then on indefinitely
The current cumulative mining mint results in a total circulating supply of approximately 1,810,745,848 STX tokens by January 2050. With the adoption of this proposal, the 2050 total circulating supply will increase by approximately 157 million STX tokens, to 1,967,777,098. Below is a visual comparison of the change.
The resulting change to the annual inflation rate of the STX token is as follows:
The activation criteria for this SIP needs input and debate, and should ultimately be defined by the Stacks community. Given this changes the monetary supply of STX, it should have to hit a high bar in order to pass and be adopted.