The Aptos Community Falls into the Dilemma of Inflation Governance: AIP-119 Proposal Sparks Controversy

The Aptos ecosystem has recently been embroiled in intense debate over a proposal AIP-119 that aims to reduce staking rewards. The proposal seeks to alleviate the inflationary pressure on APT tokens by gradually lowering the base staking reward rate, but it has also raised concerns about network decentralization and liquidity.

The proposal suggests reducing the base staking reward rate of Aptos by 1% each month over the next three months, aiming to lower the annual yield from approximately 7% to 3.79%. Supporters believe this will not only effectively control inflation but also incentivize users to move their funds to other on-chain DeFi activities instead of solely relying on passive staking.

However, opposing voices cannot be ignored. Some community members are concerned that a significant reduction in staking rewards may severely impact small validators, forcing them to exit the network and indirectly weakening the decentralization of Aptos. Some analyses point out that the reduced staking yield may lack competitiveness, leading to capital flowing to other public chains that offer higher returns.

This debate actually reflects the governance challenges that PoS public chains generally face: how to find a balance between controlling inflation and maintaining network security. Compared to the approaches of other mainstream public chains, we can see different strategies:

1. Solana adopts a dynamically decreasing inflation model year by year, with the current inflation rate being approximately 4.58%. Although the community still considers this rate to be relatively high, Solana's high level of activity seems to offset the negative impacts of inflation.

2. Sui has set a hard cap limit of 10 billion SUI, fundamentally limiting the possibility of infinite issuance. Its staking yield is relatively low (2.3%~2.5%), but the hard cap model alleviates the community's inflation concerns.

3. Cosmos offers a staking yield of up to 14.26%, but the price of ATOM tokens continues to decline, indicating that high yields do not necessarily support token value.

For Aptos, while considering "throttling" through AIP-119, it is more important to weigh its potential impact on the validator ecosystem and network decentralization. Instead of aggressively cutting rewards, the current stage may be more focused on how to "open-source"—enhancing network activity, attracting more quality projects, and building a truly prosperous and sustainable ecosystem. This may be the key to supporting APT's long-term value.

Seeking a balance between inflation control and ecological prosperity, Aptos faces challenges that not only pertain to its token economic model but also reflect the deeper governance contradictions of the entire PoS public chain ecosystem. Finding the optimal balance between ensuring network security, incentivizing participation, and controlling inflation will be a topic that Aptos and the entire industry need to continuously explore.