SIP-00009: Emissions and Locked Staking Multiplier Adjustment

proposals/00009-emissions-and-locked-staking-multiplier-adjustment.md

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+---
+number: '00009'
+title: Emissions and Staking Multiplier Adjust
+authors: Jack Chan (jack.chan@piplabs.xyz)
+sponsors: Leo Chen (leo@piplabs.xyz)
+created: 2026-01-18
+type: Standard
+status: Released
+supersedes:
+superseded-by:
+extends:
+---
+
+## Summary
+
+This proposal reduces annual token emissions from approximately 25 million to
+15,315,000 IP tokens and decreases the locked token staking reward multiplier
+from 0.5x to 0.025x. These changes intend to adjust the emissions resulting
+from higher-than-expected block production under a per-block emissions
+schedule and align incentives for long term sustainability of the network.
+
+## Motivation
+
+Story's original design targeted 20 million IP tokens emitted annually, based
+on an expected 10,368,000 blocks per year. Engineering optimizations have
+improved block production to approximately 13,140,000 blocks per year — a
+testament to network performance gains. However, the per-block emission rate
+remained unchanged, resulting in approximately 25 million tokens emitted
+annually.
+
+Story's 0.5x locked staking multiplier is a unique mechanism that allows
+locked token holders to earn staking rewards at a reduced rate. As locked
+tokens transition to unlocked status over time, aligning incentives toward
+unlocked staking promotes healthier stake distribution across the validator
+ecosystem. Reducing this multiplier to 0.025x aligns locked token holders with
+the long term vision of Story while maintaining voting power for block
+production and, when available, onchain governance voting. This new multiplier
+change also redirects the majority percentage of staking rewards toward
+unlocked token stakers.
+
+With the locked staking multiplier change, and without a corresponding
+reduction in total emissions, this shift would significantly inflate APY for
+unlocked token stakers. To recalibrate this, annual emissions will need to be
+updated from 20,000,000 IP tokens per 10,368,000 blocks, to 15,315,000 IP
+tokens per 13,140,000 blocks. This achieves two goals: it maintains a
+sustainable 6-7% APY for unlocked stakers rather than artificially boosting
+yields, and it reduces overall inflationary pressure on circulating supply.
+
+## Proposal
+
+### Token Emissions Adjustment
+
+| Parameter | Pre-launch | Actual | Proposed |
+| --- | --- | --- | --- |
+| IPs minted per block | 1.9290 IP | 1.9290 IP | 1.1655 IP |
+| Blocks/year | 10,368,000 (est) | ~13,140,000 | 13,140,000 |
+| Annual emissions | 20,000,000 IP (est) | ~25,347,060 IP | 15,315,000 IP |
+
+The emissions per block is now recalculated to be 1.1655 IP tokens per block
+produced to achieve the target annual emission of 15,315,000 IPs.
+
+### Locked Staking Multiplier Adjustment
+
+| Parameter | Current Value | New Value |
+| --- | --- | --- |
+| Locked flexible period multiplier | 0.5x | 0.025x |
+
+### Rationale
+
+Reducing the locked staking multiplier to 0.025x redirects rewards toward
+unlocked token holders, promoting healthier stake distribution. The
+corresponding emissions recalibration to 15,315,000 IP tokens per year ensures
+this shift maintains a sustainable 6-7% APY rather than artificially inflating
+yields.
+
+Voting power remains 1:1 between locked and unlocked validators. Operators in
+the active set choosing to continue running locked validators will retain
+their governance participation capabilities.
+
+### Drawbacks
+
+Locked token stakers and locked validator operators will experience
+significant reward reduction, potentially causing some Validators to exit the
+active set and operate Unlocked Validators instead. This is an expected and
+healthy outcome as locked tokens transition to unlocked status.
+
+### Alternatives Considered
+
+- **Complete elimination of locked staking rewards:** Rejected as too
+  disruptive to existing locked validators
+- **Gradual phase-out over multiple upgrades:** Rejected due to implementation
+  complexity
+- **Maintaining current emissions:** Rejected as it would not address
+  long-term sustainability concerns
+
+### User Impact
+
+**For Unlocked Token Stakers:** Yields are expected to remain competitive in
+the 6-7% APY range for flexible staking, with higher returns available through
+fixed staking periods.
+
+**For Locked Validators and Delegators:** Validators accepting locked
+delegations will see significantly reduced rewards. Delegators to locked
+validators will receive proportionally lower returns.
+
+**Token Unlock Context:** As locked tokens transition to unlocked status,
+stake distribution is expected to naturally shift toward the unlocked
+validator set--a healthy evolution for network decentralization.