# Introducing Halving of Mining Reward in Zilliqa to Accelerate Transition to Proof-of-Stake

**URL:** <https://gov.zilliqa.com/t/introducing-halving-of-mining-reward-in-zilliqa-to-accelerate-transition-to-proof-of-stake/1599>\
**Category:** Proposals\
**Created:** [September 24, 2024, 3:30pm UTC](https://gov.zilliqa.com/t/introducing-halving-of-mining-reward-in-zilliqa-to-accelerate-transition-to-proof-of-stake/1599 "2024-09-24T15:30:34Z")\
**Posts on this page:** 1\
**Showing post:** 5

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**Author:** ![will\_speaks](https://avatars.discourse-cdn.com/v4/letter/w/7feea3/32.png) [@will\_speaks](https://gov.zilliqa.com/u/will_speaks)\
**Post date:** [September 25, 2024, 9:33am UTC](https://gov.zilliqa.com/t/introducing-halving-of-mining-reward-in-zilliqa-to-accelerate-transition-to-proof-of-stake/1599/5 "2024-09-25T09:33:47Z")

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Although I am pro reducing rewards in general (not just for miners) due to the inflationary effect, there are a couple of points in this proposal that might be misunderstood.

Firstly, the pool of zil that is allocated to miner rewards is not directly controlled by Zilliqa Research or any other entity, so these rewards could not be easily reallocated to developers, users, gZIL holders etc as proposed without a network upgrade and creation of some kind of DAO treasury.

Secondly, until the switch to PoS is complete, PoW miners are very much a necessary part of Zilliqa’s infrastructure, and taking any action that reduces the number of miners objectively reduces the security of the network. Generally speaking 10-20% of rewards that miners sell will be profit – the vast majority goes towards covering electricity and hardware maintenance costs, so it’s not a particularly lucrative operation unless you have access to free electricity.

I note that this second point has point been addressed in the proposal by increasing the number of guard nodes (those maintained by Zilliqa Research), but 1) this would result in centralisation of the network and 2) maintaining such hardware is expensive – I would personally rather Zilliqa Research’s resources were targeted at incentive programs for the adoption of Zilliqa 2.0.

Here is some insight on mining costs from @vp_ezil, operator of the Ezil mining pool who ceased their mining operation earlier this year due to lack of profitability:

> [@Adjusting staking rewards](https://gov.zilliqa.com/t/adjusting-staking-rewards/1516/11):
>
> Staking nodes are getting disproportionally more rewards than mining nodes weighted by the cost of running. To run staking node you can use cheap hosting and end paying $40 a month, they do not play any role in consensus, so if something goes wrong, blockchain will continue to operate normally. There is no slashing of stake as well, staker can only lose future rewards, which is not big deal for many of them. In my experience, stakers do not check performance of the nodes often. On the other si…

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_[View the full topic](https://gov.zilliqa.com/t/introducing-halving-of-mining-reward-in-zilliqa-to-accelerate-transition-to-proof-of-stake/1599)._