# \[KGP-3\] Reduction of Klaytn Block Reward **URL:** \ **Category:** \[Closed\] Klaytn Governance Proposal (KGP)\ **Created:** [October 22, 2022, 5:09am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117 "2022-10-22T05:09:56Z")\ **Posts on this page:** 6\ **Page:** 1
**Author:** ![KaiaGovernance](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/kaiagovernance/32/5_2.png) [@KaiaGovernance](https://govforum.kaia.io/u/KaiaGovernance)\ **Post date:** [October 22, 2022, 5:09am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/1 "2022-10-22T05:09:56Z")
In consideration of the current market situation, additional minting size compared to other blockchain protocols, Klaytn team suggests the reduction of Klaytn Block Reward as follows. **Current policy on Klaytn Block Reward:** - 9.6 KLAY is minted per block - Minted KLAY is allocated to GC (34%), KGF (54%), and KIR (12%) **Proposed policy on Klaytn Block Reward:** - 6.4 KLAY is minted per block - Minted KLAY is allocated to GC (50%), KGF (40%), and KIR (10%) - There would be no change in KLAY allocated to GCs in compensation for the block generation **Justification** 1. Ensure sustainability of the Klaytn tokenomics - For the sustainable growth of Klaytn, supply of KLAY should be reduced, and demand for KLAY should be increased with the amount of KLAY burned. The value of KLAY plays the crucial role in the security of the mainnet and the prosperity of its ecosystem. - On the other hand, as a result of the negative situation in the global economy and the crypto market and the increased circulation of KLAY in the Klaytn ecosystem, KLAY price is experiencing a dramatic decrease. We need to respond to the situation by adjusting the amount of minted KLAY 1. Reduce minted KLAY relative to the market circulation - Considering the actual demand for KLAY from the market, burned amount, and needs of KLAY for the growth of the ecosystem, supply of KLAY should be reduced to ⅔ of the current block reward. - If we adopt the proposed policy, the amount of minted KLAY relative to the market circulation of KLAY will be reduced from 10 percent to 6.48 percent, which is lower than the average of top 20 protocols (8.6%). In terms of total supply, the rate goes down to 2% from 3% due to the proposed policy. - This is our first effort to adjust the supply in line with the actual market situation. In the future, the policy can be again adjusted in accordance with growth of Klaytn, changes in the market situation, and introduction of a new consensus mechanism. ---
**Author:** ![Benson\_Thrust](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/benson_thrust/32/35_2.png) [@Benson\_Thrust](https://govforum.kaia.io/u/Benson_Thrust)\ **Post date:** [October 23, 2022, 11:24pm UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/3 "2022-10-23T23:24:46Z")
I agree this proposal. The effectiveness of reducing the quantity of issuance being added is debatable, though. The organization and dissemination of the KIR/existing KGF’s state (including historical context) and future course appear to be more crucial than the current proposal. I believe it would be beneficial if you could provide a summary of KIR/KGF status/plan that various stakeholders, including communities and companies on Klaytn, could understand. It seems vital to think about the direction KIR and KGF should be implemented to help the ecosystem expand rather than changing the amount of KIR/KGF reserve. The community has recently voiced a variety of perspectives, but it appears that the crucial factor is not the sum of KLAY paid but rather if the paid KLAY is returned to the environment to increase its worth. If the foundtaion are unable to respond right away, it would be wonderful if you could share the procedure along with this recommendation. It seems so hard to handle as pretty challenging things. I appreciate all of your effort. * * * 본 건에 대하여 찬성합니다. 다만 현재 추가 되는 발행량을 감소하는것이 효과적인지는 조금 의문이듭니다. 현 제안 내용보다, KIR/KGF의 현황(이전 내역 포함)과 앞으로의 방향성을 정리하고 전파하는게 더 중요하다고 보여집니다. 커뮤니티, 사업자등 여러 이해관계자가 납득할수 있는 안을 정리해주시면 좋을 것 같습니다. KIR/KGF 리저브의 양을 조정하는게 아니라, 어떤 방향으로 KIR, KGF가 집행되어야 생태계의 확장에 도움이 될지 고민이되어야한다고 보여집니다. 근래 커뮤니티에서 여러 의견을 주시나, 핵심은 지급량이 아니라 지급된 클레이가 생태계 가치 확장으로 환원되었는가로 보여집니다. 당장 답을 내리기 어렵다면, 이런 제안과 마찬가지로 과정을 공유해주셔도 정말 좋을 것 같습니다. 고생이 정말 많으십니다. 해당 부분이 많이 어려운 것으로 느껴집니다. 잘 해결되기를 바라는 마음으로 적어보았습니다. ---
**Author:** ![GenieKim\_NEOPLY](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/geniekim_neoply/32/32_2.png) [@GenieKim\_NEOPLY](https://govforum.kaia.io/u/GenieKim_NEOPLY)\ **Post date:** [October 25, 2022, 2:34am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/4 "2022-10-25T02:34:54Z")
I agree with that proposal. It is certainly true that the issuance volume is higher than other chains, so I agree with the decrease. However, even if there is a decrease through this agenda, it is not a small amount to allocate 100 million for KIR/KGF. It is necessary to evaluate in more detail how much the ecosystem value has actually increased through KIR/KGF. It is also advisable to re-evaluate the existing quantities invested in the project and consider adjusting the KIR/KGF pool. Also, for active participation of the community, it would be good to quickly support the process or platform so that the community can give opinions step by step when reviewing KIR. ---
**Author:** ![KaiaGovernance](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/kaiagovernance/32/5_2.png) [@KaiaGovernance](https://govforum.kaia.io/u/KaiaGovernance)\ **Post date:** [October 26, 2022, 6:20am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/5 "2022-10-26T06:20:51Z")
[Update] The proposal was approved by the Klaytn Governance Council (GC) through the voting on 21-24 October 2022. Among the 36 GC Members, 26 Members voted, and 100 percent of the participants agreed on the proposal. - GC Members who voted: Jump-Everstake, Verichains/VNG, Alameda Research, Ground X, Krosslab, Maekyung Media Group, MakerDAO, NFT Bank, Kracker Labs, Hanwha Systems, AhnLab, Kakao Corp, Wemade, Korea Economic Daily, GS Retail, Gumi, LG Electronics, FSN, Hashkey, Kakao Games, Kakao Entertainment, NEOPLY, SK Networks, Sygnum, Thrust, POST VOYAGER (Cocone) - GC Members who did not vote: LX International (retired on 31 October 2022), Kakao Pay, Celltrion (retired on 31 October 2022), Kakao Space (retired on 31 October 2022), Pearl Abyss (retired on 31 October 2022), Everrich (retired on 31 October 2022), Netmarble, AQX, Binance, Hashed-Ozys The schedule for the parameter update based on the GC decision is as follows: - Baobab - Deadline of on-chain voting by network operators: by 2022/10/27 04:19:04 KST (105235199) - Expected timing of update completion: 2022/11/03 04:19:05 KST (105840000) - Cypress - On-chain voting by network operators: 2022/10/30 23:26:20 ~ 2022/11/06 23:26:19 KST (105235200~105839999) - Expected timing of update completion: 2022/11/13 23:26:20 KST (106444800) ---
**Author:** ![KaiaGovernance](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/kaiagovernance/32/5_2.png) [@KaiaGovernance](https://govforum.kaia.io/u/KaiaGovernance)\ **Post date:** [November 3, 2022, 2:28am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/6 "2022-11-03T02:28:52Z")
[Update] The update of Baobab was completed as planned at the block height of 105840000 (2022/10/27 04:19:04 KST). ---
**Author:** ![KaiaGovernance](https://yyz1.discourse-cdn.com/flex035/user_avatar/govforum.kaia.io/kaiagovernance/32/5_2.png) [@KaiaGovernance](https://govforum.kaia.io/u/KaiaGovernance)\ **Post date:** [November 14, 2022, 12:20am UTC](https://govforum.kaia.io/t/kgp-3-reduction-of-klaytn-block-reward/117/7 "2022-11-14T00:20:45Z")
[Update] The update of Cypress was completed as planned at the block height of 106444800 (Nov 13, 2022 23:42:59 KST)