Proposal to Reduce Massa Blockchain Yearly Inflation to 2.5% ( Block reward 0.4)

Massa Improvement Proposals
21

Regarding FLOW, I was lucky to invest in their ICO, and it’s no surprise that the price was flying down after people did 461x(based on ATH shown above) on their initial investment, so I don’t think that is only related to inflation.

To be honest, the current 6% is not too crazy, and of course, I would like to see APY below 30%. However, we do not need to do anything. It’s just a matter of months.

What matters is whether people are using the Massa blockchain or not. Inflation will go down on its own.

22

Btw I think there is a confusion here between inflation of the supply and inflation of the price of goods.
The target inflation of central banks you describe is about the inflation of the price of goods (CPI) (or devaluation of the money). While the inflation due to block rewards is the inflation (increase rate) of the money supply.

As a small benchmark:

  • Inflation of dollar money mass M1 was ~600% in 10 years, while inflation of CPI was 33% in 10 years.
  • Inflation of USDT supply was 50% in the last 12 mth (88B to 132B), while the “target inflation” is 0% wrt USD (stable coin).
  • Inflation of BTC supply was ~1% in the last 12 mth, while its price is up 150%, equivalent to an inflation of minus 60% (if goods = USD and money=BTC).
5 Likes
23

after reading the comments I might change my idea. Maybe we should explore more burning mechanisms instead of cutting the block rewards.

1 Like
24

Yes, totally support this proposed inflation reduction measure!

25

Hi,

It’s worth to create a separate forum thread on this.

26

Hi,

  1. Disagree to cut block rewards. Current higher than average market APY is one of incentives that sticked me to MAS.

  2. Your calculations is not correct in a long-term period. MAS price will definitely dump, but not because of high block rewards. Take a look on this:

image
image1542×1006 48 KB

Total supply 1.03B MAS
Circulating supply 150.82M MAS (15%)

Regularly I stay away from projects with such a terrific coinomics, MAS is an exception because the technology is attractive.

27

Hi @adm and thanks for the feedback !

  1. I agree that this makes sense from the standpoint of stakers, less so from the standpoint of non-stakers (eg. users) from whom value is extracted. For the success of the blockchain, we need both of those groups to be happy. It’s a delicate balance that is hard to estimate, which is why we want to subject it to community vote. That being said, your argument of Massa being attractive due to its high staking APY is completely valid.

  2. The fact that the initial distribution is released progressively over years instead of having been fully released at launch was a requirement to avoid the risk of instant death of the project at launch. The effects on price of a given group deciding to sell (assuming they do) tends to depend on the price at which that specific group acquired the tokens. The net effect of sales on price is hopefully compensated by the influx of new users buying to use the services being released (or to speculate). This topic focuses on addressing one particular source of price leak, but of course there might be others, so feel free to open a dedicated topic on any particular one you want to address.

I would also like to point you towards two other topics to get your feedback:

28

Hey Damir,

Thank you for your time addressing my concerns.
I’ve created the thread Massa's tokenomics and token unlocks

29

Hey guys,

Just a quick heads-up, a community member has officially submitted a proposal to reduce Massa’s yearly inflation to 2.5% (block reward: 0.4 MAS) on the governance platform :

:backhand_index_pointing_right: https://mip.massa.network/proposals/0

Since this topic was already discussed here, it makes sense to bring it back now that it’s officially part of the process.

:spiral_calendar: Timeline :

• Discussion phase: until May 1
• Voting phase: from May 1 to May 8

Feel free to drop your opinion, challenge the idea, or add anything useful.
Let’s make the most of the discussion period before the vote kicks in.

2 Likes
30

Great idea. I wish if the thread could be updated, with the latest statistics, such the current ciruclating supply, etc. When a community member reads it for the first time, will think the statistics are wrong, but they were collect at the time of writing and not now.

31

You miss the payment and then they will leave the small validators, which is the sense to run a node and be in minus, you don’t even have enough to pay the lease. In testnet people spent a lot of money, considering that there were about 8000 nodes, the cheapest server was ~5 euro and if you calculate for a year you have at least 480000 euro, and what we have back, the decrease in staking gain. This is where the marketing should do something, where is the money in his, where are the influencers?

32

As an economist and someone who’s been closely analyzing the Massa ecosystem, I’d like to offer a deeper perspective on the proposal to reduce annual inflation to 2.5% by lowering the block rewards.

1. Economic rationale – solid, but timing matters

On paper, reducing yearly inflation to 2.5% sounds like a smart long-term move. It can strengthen the MAS token’s store-of-value narrative and improve its appeal to investors who prioritize sustainability and low dilution. However, we must not ignore the current phase of Massa — this is still an early-stage blockchain trying to bootstrap its validator set, community, and ecosystem.

Slashing block rewards now could significantly weaken validator participation, especially considering that ~75% of MAS is currently staked, mainly due to the attractive ~40% APY.

2. Risk of slashing rewards too fast

Reducing staking APY to ~20% might seem reasonable, but in practice, it risks triggering:

  • Validator churn – smaller stakers may exit, reducing decentralization.

As Gicu said: You miss the payment and then they will leave the small validators, which is the sense to run a node and be in minus, you don’t even have enough to pay the lease.

  • MAS sell-off – stakers who joined primarily for rewards might dump their holdings.
  • Loss of momentum – lower staking incentives may kill the “flywheel” of early user adoption.

We’ve seen this play out in other chains — reward cuts without matching utility growth can backfire.

3. Context from the unlock schedule

Looking at the unlock chart, large portions of tokens are set to be released gradually over the coming years. Even if emissions via block rewards are reduced, token unlocks will still introduce supply-side pressure, especially from:

  • Community & Ecosystem allocations
  • Private Sales
  • Founders’ shares

So if the goal is to control inflation or stabilize the price, we need more than just a reduction in block rewards.

Better alternatives to reduce inflation impact:

Rather than cutting validator incentives now, here are more sustainable options:

  1. Boost MAS demand via real usage:
    If more people actually need MAS to use dApps, pay fees, stake, or govern — that demand naturally offsets emissions.
  2. Implement a burn mechanism:
    Like Ethereum’s EIP-1559 — burning part of transaction fees could reduce net inflation without hurting validator income.
  3. Dynamic reward system:
    Tie staking rewards to factors like lock duration, validator performance, or governance participation. This encourages long-term alignment.
  4. Gradual reduction over time:
    Instead of a sharp cut, use a phased schedule — e.g., lower rewards by 10% every 6 months — giving the market time to adjust.

Final thoughts

Reducing inflation is a good idea in principle, but it must be timed and executed carefully. We’re not yet at a stage where MAS has strong organic demand. Cutting block rewards without growing the ecosystem could shrink validator participation, hurt sentiment, and slow down adoption.

Let’s not risk killing the fire while it’s still lighting up.

A better approach would be to focus on building usage, incentivizing development, and introducing deflationary mechanics — then reward cuts can come later as part of a more mature economic transition.

Happy to hear thoughts from others in the community.

2 Likes
33

Totally agree with you. No need to use this bullet rigth now. The inflations is the smallest concern currenty.

1 Like
34

I’m about to submit an alternative proposal and would like to share it here for open discussion within the same thread.

Proposal: Balanced Inflation Strategy for Massa (Alternative Path)

Overview

This proposal offers a more sustainable and ecosystem-friendly approach to reducing MAS token inflation without cutting validator rewards, which currently serve as the primary incentive for network security and token lock-up.

Instead of reducing block rewards, this proposal focuses on:

  • Gradual increase in fee-related costs (gas and storage)
  • Future implementation of a burn mechanism on transaction fees
  • Maintaining validator incentives while introducing deflationary pressure
  • Suggesting the introduction of a new governance parameter for base transaction gas price

Parameter Changes

1. Deferred Call Min Gas Cost

  • Proposed Value: 100 nanomassa (10× current value)
  • Purpose: Introduces a meaningful economic threshold for deferred smart contract operations. This change helps deter spammy or inefficient usage and enables deflationary mechanisms (e.g., burning part of this minimum fee in the future).

2. Deferred Call Constant Gas Cost

  • Proposed Value: 2,000,000 gas units (up from 750,000)
  • Purpose: Increases the execution cost of deferred calls to make them more economically balanced with regular transactions. This results in higher validator rewards and stronger base for future fee burning, while still being affordable (~0.002 MAS at 1 nanomassa gas price).

3. Ledger Cost Per Byte

  • Proposed Value: 0.0002MAS per byte (up from 0.0001)
  • Purpose: Makes on-chain storage more economically significant, discouraging bloated or careless data usage, and raising average transaction fees — laying the groundwork for deflation.

Suggested New Parameter (for governance discussion)

Parameter: MinTransactionGasPrice
Proposed Value: 0.15 – 0.2 MAS (vs. current ~0.1 MAS default)
Rationale:

  • Prevents low-value or spam transactions from clogging the network
  • Increases minimum revenue per block
  • Supports future fee-burn models
  • Helps stabilize long-term token economics without affecting validator rewards

Future Recommendations (non-parameter roadmap)

  • Fee Burn Implementation: Burn a portion of transaction fees (e.g., 50%) to reduce circulating supply, following the model of Ethereum’s EIP-1559.
  • Tiered Staking Incentives: Introduce variable APYs based on lock-up duration or governance participation, improving long-term retention.
  • Ecosystem Growth: Launch grant programs and incentive structures for developers to build real use cases around MAS.

Final Thoughts (as always)))

This proposal aims to preserve validator income while gradually transforming the network’s economic model from inflationary to usage-driven and deflation-aware.
It is a balanced, non-destructive path toward long-term token value growth, higher sustainability, and more meaningful economic behavior on-chain.

Let’s build toward long-term value — without destabilizing what’s already working.

1 Like
35

Transaction cost increase doesn’t make any sense, especially considering that there are not many people using Massa blockchain. We have about 3-5k transactions a day with a theoretical capacity of 10k in one second.

The only way to go is to bring more people, projects, and liquidity on chain.

1 Like
36

Hey guys,

Just a quick reminder: each governance proposal should have its own dedicated forum topic.

A second proposal was just shared under the same thread, and things can quickly get confusing if multiple ideas are discussed in one place.

If you’re submitting a proposal, please make sure to open a new topic with a clear title matching the proposal, that way the discussion stays focused and easy to follow.

Thanks !

1 Like
37

This is a proposal to adjust the staking rewards. To be precise, the goal is to reduce the staking rewards to a certain extent. Common sense says that stakers will feel uncomfortable. However, if you want to vote on this proposal, you must become a staker, which seems contradictory. Is it necessary to introduce non-staking voting?

38

I’m a current staker, but I support this proposal!

39

Hi everyone,

After carefully reviewing the proposal and reading through the comments and discussions, I’d like to highlight a few key points that I believe need further consideration.

1. The Core Issue: Adoption and Utility
At its core, this proposal seems to be shifting focus away from the fundamental challenge Massa currently faces: user adoption and the creation of meaningful dApps and smart contracts. Without an ecosystem that attracts real users and developers, simply adjusting tokenomics won’t address the underlying problem.
Moreover, there’s little evidence to support the idea that reducing the block reward will significantly improve price action ¶ or stabilize the token. As some have already pointed out, the most significant pressure comes from token unlocks. The staking rewards, in comparison, represent a very small portion of overall inflation.

2. Impact on Users
To quote Damir from an earlier post:

“I agree that this makes sense from the standpoint of stakers, less so from the standpoint of non-stakers (e.g., users) from whom value is extracted.”

While I understand this concern, I believe it’s somewhat premature. Given the lack of infrastructure and active applications, it’s unclear that there’s currently any meaningful user base being affected. Until a functioning ecosystem is in place, users are largely unaffected by staking dynamics.

3. Stakers
a. Reduced Incentives: The most immediate effect is a cut in rewards for stakers—plain and simple.
b. Increased Centralization: Lower APY could discourage smaller stakers, pushing the network further toward centralization. This is especially concerning given that current data already shows around 60% of rolls are controlled by the top 20 stakers.
One example shared in the community Telegram highlighted this issue: moderators have discouraged staking unless one holds more than 10k MAS, as the returns are too low to justify smaller holdings. While staking pools could mitigate this, the team has apparently decided not to pursue that route, which leaves smaller participants with little incentive to engage.

4. Founders, Team, and Token Unlocks
This proposal seems to disproportionately benefit those with large unlocked allocations. By reducing block rewards (and thus circulating supply), it could help support higher prices in the short term, allowing this group to sell at better valuations. However, as mentioned earlier, staking rewards contribute very little to total inflation when compared to the massive upcoming unlocks. The broader inflationary pressure isn’t being addressed here—just shifted.

In conclusion, while I appreciate the intent behind reducing inflation, I don’t believe this proposal solves the real challenges Massa is facing. Without broader adoption, user utility, and infrastructure development, tokenomics tweaks may bring little long-term value and could potentially harm decentralization.

Looking forward to more community input on this.

40

This propocele gives us nothing but losing node run. I am also in favor of reducing inflation, but this is a little further ahead.
If we cut the node income, which is very low in density on the network right now, those who run nodes will not even be able to pay the vps fee with their earnings.