Community members of Canto, the Cosmos-based layer 1 blockchain, are expected to vote on three significant proposals this Thursday that could potentially affect liquidity mining incentives and block rewards issuance rate. These proposals could benefit CANTO token holders as they would result in a lower inflation rate of the overall supply.
The proposed changes, if passed, would reduce the mining incentives for liquidity pools such as ETH/CANTO and ATOM/CANTO by an average of 38%. Additionally, Canto’s inflation rate, or the number of CANTO tokens emitted per block, would be reduced to 4.76 CANTO, representing a 15% decrease.
Back in February, Canto community members had voted to reduce security emissions and liquidity mining incentives. Contributors had stated that the project had already attracted “deep liquidity in the Canto DEX and Canto Lending Market” and they were now focused on optimizing the long-term sustainability of Canto’s incentives program.
These recent governance proposals, expected to go live on May 11, signify another effort to slow down security emissions, also known as block rewards, and liquidity mining rewards across the board. The total maximum supply of CANTO inflates over time at a constantly decreasing rate to maintain the security of the Canto network.
Security emissions, which are block rewards given to stakers for securing the network, differ from liquidity mining incentives, which are awarded to users who provide liquidity to various crypto pools on Canto.
At the time of writing, the native token for the Canto blockchain, CANTO, has decreased 2.6% in the past 24 hours, to a value of 22 cents.
On the one hand, the potential reduction of liquidity mining incentives and block rewards issuance rate could make CANTO tokens more valuable and attractive to investors, as a lower inflation rate translates to a likely increase in the token’s price. On the other hand, the reduction in incentives may also deter some users from participating in the network, which could affect the overall liquidity and security of the Canto blockchain.
It’s noteworthy that the outcome of the vote on these governance proposals will reflect the community’s consensus on the future direction of the Canto project. As blockchain technology continues to evolve, the delicate balance between incentives, token value, and network security remains a topic of interest, highlighting the importance of active participation from community members in shaping the future of projects like Canto.
Source: Coindesk
