BlockBeats news: On January 16, the Berachain community proposed a plan to "reduce the annual inflation rate of the BGT token from 8% to approximately 5%." The proposal aims to enhance the long-term economic sustainability of the network, improve emission efficiency, and align with the inflation levels of major Layer 1 (L1) networks.
The proposal emphasizes that this move will not alter the existing PoL reward mechanism, treasury allocation logic, or validator incentives, but will only adjust the total annual issuance of BGT. This will be achieved by reducing the "reward rate" parameter. The proposal analysis points out that lowering inflation will reduce the returns for BGT and BERA holders, but it will also enhance the relative scarcity of BERA. Additionally, the total incentives received by validators, decentralized applications, and liquidity providers will also decrease. The team stated that between 2026 and 2027, their goal is to further reduce inflation to levels closer to that of Ethereum. The proposal is currently open for community discussion.