Canto Blockchain Set for Vote on Reduction in Liquidity Incentives, Block Rewards

Community members of Canto, the Cosmos-based layer 1 blockchain, are set to vote on three proposals Thursday that would reduce liquidity mining incentives as well as the issuance rate of block rewards.

The changes theoretically should benefit holders of the CANTO tokens, since the proposed changes would result in a lower inflation rate of the overall supply.

If passed, the mining incentives for each liquidity pool on Canto such as ETH/CANTO and ATOM/CANTO will be reduced on average by roughly 38%, according to a blog post. The governance proposals would also reduce Canto’s inflation rate, or the number of CANTO tokens emitted per block to 4.76 CANTO, representing a 15% decrease.

Canto community members passed a vote in February to reduce security emissions and liquidity mining incentives. At that point, contributors wrote that the project had already succeeded in attracting “deep liquidity in the Canto DEX and Canto Lending Market,” and they were now “looking to optimize the long-term sustainability of Canto’s incentives program.”

The recent governance proposals, set to go live on May 11, represent another step to slow down block rewards or “security emissions” as well as liquidity mining rewards across the board.

“In order to maintain the security of the Canto network, the total max supply of $CANTO inflates over time at a rate that is constantly decreasing,” according to Canto docs.

Security emissions are block rewards given to stakers for securing the network, while liquidity mining incentives are awarded to users who provide liquidity for various crypto pools on Canto.

The native token for the Canto blockchain used to pay gas fees - CANTO - has decreased 2.6% in the past 24 hours to 22 cents at press time, per CoinGecko.