Lisk, a blockchain platform designed to make developing decentralized applications (dApps) as easy and accessible as possible, has just completed its penultimate block reward halving.
As of block 7,451,520, Lisk (LSK) has now reduced its block reward by one third, while reducing inflation to just 4.58%. This means Lisk delegates now earn one third less for their services and could lead to a reordering of the delegate list as current delegates drop out.
One More to Go
The reward reduction now ensures that there are just 2 LSK minted with every newly discovered block, down from the previous block reward of 3 LSK. According to a countdown timer provided by Liskdelegate.io, it will now be a further 349 days before the reward is reduced for the final time, falling to just 1 LSK minted with each block from then on.
With Lisk, blocks are forged every 10 seconds. At this rate, around 8,640 new blocks will be forged every day. This will add around 17,280 LSK to the circulating supply every day, currently worth around $13,824 based on the current LSK price (~$0.8). This sum will be distributed among the 101 active delegates in addition to any network fees.
The Market Moves Not
Despite news of the block reward reduction, Lisk remains in decline and has recorded staggering losses over all short-term time scales. In the past day, LSK has dropped by just over 1%, while the cryptocurrency is down more than 39% in the last three months, and 59% in the last six.
This is in stark contrast to other cryptocurrencies with a block reward halving schedule, such as Bitcoin (BTC) and Litecoin (LTC) which tend to display positive price action in the run-up to a block reward reduction event, as BeInCrypto has touched on before. For example, back in early August, Litecoin gained over 10% in the days leading up to the fork date, while Bitcoin’s halving schedule has been widely linked to its impressive price explosion.
Part of the reason Lisk hasn’t seen its market move could be due to its gain momentum as a dApp-development platform since its own development has been extremely slow. In light of this, only a handful of dApps have been launched using Lisk sidechains, which pales in comparison to its main competitors in Ethereum, EOS, and Tron.
Similarly, Lisk differs from most comparable digital assets, since LSK is not actually a cryptocurrency. Instead, the token is used for delegate voting and paying fees on the Lisk blockchain, similar to the function of ether on the Ethereum blockchain.
Are block reward reductions are an outdated method of countering inflation and ensuring scarcity? Let us know your thoughts in the comments below.
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