Proposal: Reduce TRX block rewards

[Jamestepfoward]

Simple Summary

This proposal suggests reducing the TRX block rewards. The adjustment aims to create a more balanced supply-demand dynamic encouraging increased user participation in staking. This will benefit all stakeholders, ensure the TRX block rewards consistent with the maturity of the TRON network, and promote the healthy and sustainable development of the TRON ecosystem.

Motivation

The current TRX block rewards effectively stimulated network staking and transaction volume growth in the early stages. However, as the TRON network develops, the relatively high production rates of TRX may dilute the token's value over time and reduce the incentive for long-term staking. Timely adjustments to TRX block rewards can better promote the healthy and sustainable development of the TRON network and TRON ecosystem. This proposal recommends a reduction in TRX block rewards at this time. It offers several benefits:

• Enhance Deflation: Lowering the TRX block rewards will enhance the network’s deflation rate, potentially increasing its value.
• Incentivize Staking: Leveraging the advantage of TRON's staking model, the increase in TRX value can encourage more users to stake TRX to obtain the resources for transactions.
• Strengthen Network Security: Increased staking participation strengthens the network’s security by locking up more TRX.
• Improve Economic Incentives: Align token distribution with the maturity of the network, ensuring that incentives remain robust and meaningful for both new participants and long-term holders. Mainstream blockchain protocols have implemented similar adjustments to maintain sustainable development.

Specification

The core parameters of TRON network that determine the TRX block rewards are network parameters No. 5 and No. 31:

• The current value of network parameter No. 5 is 16 TRX, indicating that with each block production, TRON network rewards 16 TRX to the Super Representative (SR) who produced the block and the users who voted for that SR.
• The current value of network parameter No. 31 is 160 TRX, indicating that with each block production, TRON network rewards 160 TRX to SRs, SR partners and users who voted for them.

It is proposed to adjust the block reward from 16 TRX to 8 TRX, and adjust the voting reward from 160 TRX to 128 TRX.

How to Initialize the Voting Request

This is the command of initiating the voting request:

• createProposal 5 8000000 31 128000000

Timeline

Any opinions and discussions about this proposal are welcome before voting.

The estimated timeline:

• Creation time of the voting request: 10th June 2025
• The effective time of voting request: 13th June 2025

Background

The implementation of a series of proposals within TRON's tokenomics model has significantly impacted the TRX supply of the TRON network, resulting in a transition from inflation to deflation, with a potential rebound trend showing recently.

As can be seen from the figure below, since the Proposal #27 took effect in November 2019, the TRON network has consistently produced a total of 176 TRX per block as reward for SRs, SR partners and voters. This increased reward structure at the time incentivized more users to participate in TRON's on-chain governance by staking TRX. With the implementation of Proposal #51 in February 2021 and Proposal #71 in October 2021 to increase transaction fees, the TRON network quickly changed from an inflationary model to a deflationary model. Proposal #79 in December 2022 further increased transaction fees, significantly boosting the network's deflation rate. With the combined effects of these proposals and the growing transaction volume on TRON, the total TRX supply has gradually decreased in recent years, positively impacting the TRON ecosystem's development.

Meanwhile, with the Proposal #92, Proposal #94, and Proposal #97 took effect in sequence from August to October 2024, TRON increased the energy supply to adapt the blooming development of dApps. The net increase of TRX supply shows a gradual increasing trend in recent months, indicating a potential resurgence of inflation.

According to the supply changes shown in the above figure, based on the previous deflationary measures implemented and the deflationary results achieved, now it is the opportune time to reduce TRX block rewards. This action will further solidify network deflation, incentivize staking, and ensure the sustainable and healthy development of the TRON ecosystem.

Data Analysis

Impact of adjustment on inflation

According to last month's on-chain data, the current annual inflation rate is -0.81%. If TRX production is reduced in the future, the annual inflation rate will decrease accordingly. In order to set a discussion benchmark, the following estimates the corresponding annual inflation rates for different reductions in TRX production rates for your reference. If TRX production drops 20% or 50%, the annual inflation rate will be -1.20% or -1.78%, respectively. A detailed comparison is shown in the following table:

	Last month	Reduction of TRX rewards by 20%	Reduction of TRX rewards by 50%
TRX daily burned	7,278,625 TRX	7,278,625 TRX	7,278,625 TRX
TRX daily produced	5,067,227 TRX	4,053,782 TRX	2,533,614 TRX
TRX daily net increment	-2,211,398 TRX	-3,224,843 TRX	-4,745,011 TRX
Annual Inflation rate	-0.85%	-1.24%	-1.83%

Impact of adjustment on Staking Rate

Currently, the staked amount of TRX is 43.64 billion, with a TRX staking rate of 46.01%, up by 0.80% than that of last month.

If this proposal takes effect in the future, the reduction in TRX production rate will increase TRX scarcity, incentivizing users to shift from TRX burning to staking for resources, thereby driving an increase in staked TRX. At the same time, maintaining a reasonable energy supply can effectively ensure the stability of dApp transaction fees while reinforcing deflation, thus preserving the robustness of the TRON dApp ecosystem.

Rationale and Expected Benefits

• Enhanced Deflation: Reducing TRX production will help enhance deflation, ensuring tokenomics model remains competitive, protecting existing token holders, and increasing long-term value.
• Improved Ecosystem Confidence: By addressing inflationary pressures, the proposal is expected to boost investor and user confidence, leading to broader ecosystem participation.

[CooperDepp]

If the TRX generation amount is reduced, SRs and giant stakers would be influenced most, most ordinary users feel nothing about it, the transaction fees almost remain the same. As a mini investor, I agree with this, and reduction less than 50% won't have obvious influence, let's make it at least 50%.

[KrisdiaPaul]

According to the slope of TRX supply, time to let TRX production decrease, but the situation is not that bad, 10% is fine at the beginning.

[tronfansbyte]

The current inflation rate is too high, please supply less new TRX, in a healthy economic model, it's ok to keep the inflation rate between -2% to 2%, considering the energy model, it should be fine to deduct 20%-50% of the TRX rewards.

[LauraYH]

A deflationary model and reduced inflationary pressures can attract more projects, developers, and users to TRON. This creates:

• A larger and more vibrant community, fostering collaboration and innovation.

• Increased opportunities for developers to monetize their dApps through a growing user base and potential partnerships.

[TrueDID]

The recent Proposals have increased TRX supply to support dApp development, this has led to a gradual resurgence of inflation. To counterbalance this, reducing block rewards is a timely adjustment. Ensuring a sustainable deflationary model will help maintain TRON’s competitive edge in the market. Good Move.

[jernganl]

It's a good news for TRX price and the TRON ecosystem if the proposal pass.
Since solana is reduce rewards also.

[brooklynn1212]

This proposal may drive the development of TRON ecosystem applications such as DeFi and NFTs to generate more transaction fee revenue, thereby reducing reliance on block rewards.

[WalterBrooks]

If the TRX generation amount is reduced, SRs and giant stakers would be influenced most, most ordinary users feel nothing about it, the transaction fees almost remain the same. As a mini investor, I agree with this, and reduction less than 50% won't have obvious influence, let's make it at least 50%.

The new generated TRX of SRs and whales will be influenced, but as energy becomes more precious, they can still benefit from the resources. Besides, the deflationary would potentially make the TRX price rise, there is chance the total profit of whales increase actually. Considering the stability, 50% is too much, 10%-20% is appropriate.

[laurenceja]

Deflation is a positive trend for the network, and the ultimate beneficiaries are all network users. But the most direct impact of reducing block rewards is on super representatives, the producers of the TRON network, regardless of other favorable factors, the block reward cannot be reduced too much, and a small reduction is reasonable.

[Bellgin]

If TRX reward is decreased, the cost increase will attract more user to rent energy for txn consumption rather than just burning, as mentioned above, then I believe there should be some modification for Stake 2.0 model, or the entire resource model to be more flexible for users that do not have much transfer daily, break their overall cost into pieces. Renting energy is not that affordable as it is right now.

[xxstar-developer]

🚀 There are some key takeaways if reduce block rewards by 20%

🔥 1. TRX Deflation Gets Stronger

• Less block rewards = fewer new TRX in circulation = more scarcity.
• The annual deflation rate jumps from -1.58% to -2.01% using latest 1 year TRX supply calculation. (~26.62% increase).

💰 2. Staking Rewards & Participation Drop

• Some stakers might leave—staking ratio could drop from 44.8% to 37.4%.

• A total of 3.17B TRX is expected to be unstaked, accounting for 7.5% of the total staked TRX, leading to a decrease in the staking ratio from 44.8% to approximately 37.4%, with a corresponding ~7.5% decline in total network votes and SR votes.
• Staking rewards take a hit: 4.73% → 3.98%～4.20% assuming block rewards drop 20%.
• Even with energy revenue factored in, real yield nudges down: 21.26% → 20.53%~20.75%.

📈 3. TRX Price – Upward Potential?

• With fewer TRX being minted, the market could respond with price appreciation.
• If TRX price goes up, it partially offsets the lower staking rewards (at least in USD terms).

🔄 4. Trading & Network Revenue? Not Much Change

• Transaction volume, number of transactions, staking/burn revenue = little direct impact.

This is just the data-driven take, but actual market behavior depends on how the TRON ecosystem and its users react. Do we see a price bump? Will staking incentives need tweaking?
Let's discuss! 💬

[lvs0075]

• Some stakers might leave—staking ratio could drop from 44.8% to 37.4%.
• Even with energy revenue factored in, real yield nudges down: 21.26% → 20.53%~20.75%.

How did you get those two figures?

[angrynurd]

I have a perspective that if the block reward is reduced, even by just 10%, the decrease in SRs' revenue would be immediate, and the reduction in stakers' rewards would also be instantaneous. The decline in these two types of income would be keenly felt by participants. However, the benefits brought by deflation (such as a rise in TRX price) might be gradual or even ineffective in the short term. How can this situation be balanced?

[xxstar-developer]

• Some stakers might leave—staking ratio could drop from 44.8% to 37.4%.
• Even with energy revenue factored in, real yield nudges down: 21.26% → 20.53%~20.75%.

How did you get those two figures?

it seems that the majority (70–80%) of staked TRX comes from long-term holders who are unlikely to unstake. This means that only about 5–10% of staked TRX is at risk of being unstaked in response to lower rewards.

Staking TRX can obtain both energy/bandwidth and vote rewards(~4.73% for now), i used estimated energy yield rate (~9energy/trx * 50sun * 365 = 16.43%). If block rewards drop 20%, then staking rewards will drop a few, but energy yield rate may rise.