Block Reward Extension

Block Reward Proposal

(Edited on 1/28 to reflect community feedback and proposals being submitted.)

Currently the Phore block rewards are set to decrease to 5 PHR on block 250,000, which we are scheduled to reach on March 9th, 2018. As currently structured, this would mean that masternode rewards would change from the current 4.2 PHR to about 2.7 PHR, staking rewards would change from 2.8 PHR to 1.8 PHR, and the Phore project development budget would reduce from .77 PHR to .5 PHR.

Some members of the community have argued that the proposed decrease in block rewards is happening too early in Phore’s history. Others have voiced concerns that the development budget is not large enough to compensate the team for delivering the very ambitious 2018 roadmap. Others have advocated that we should keep the current schedule and let the block rewards decrease in March.

The team has looked into this issue and after significant community discussion, we have split this into two separate proposals for voting:

  1. Extend current block reward structure for 12 months.
  2. Set development budget block allocation to 1 PHR.

Since we are a community governed coin, we want the community to vote and decide what is best for the long term success of Phore.

We recognize that this is an important decision and could be a contentious discussion so we want to allow as much time as possible for the community to be heard and for masternode owners to cast their votes on what they believe will best serve the long term interest of Phore.

Active discussion in the Phore Discord has been going on in the #block-rewards-chat channel since Jan. 22nd, and the voting will begin today, and continue until the February budget cycle is finalized. The budget finalization point will be reached at block 213,120, which is scheduled to occur around February 11th or 12th depending on your local time zone. You can find the current block by either hovering your pointer over the green check mark in the lower right corner of the Phore wallet, or by opening the debug console, running the getinfo command, and looking at the number on the “blocks” line.

We will also be submitting a proposal for the allocation of the budget for the core team for the month as well, so please don’t forget to vote for that proposal when it becomes available–we are finalizing the details of that now.

If either of these proposals are approved, we will upgrade wallets and masternodes before the block reward decrease would take effect on March 9th. We expect to have several other upgrades and new features ready by then, so we would issue a new release and announce a hard fork, most likely during the first week of March, ahead of the March 9th block reward change.

Here is a summary of what the block reward schedule will be depending on the outcome of the voting:

Neither Proposal Approved (current baseline)

Date Block Height Masternode Reward Staking Reward Dev Budget
Current <= 250,000 4.2 PHR 2.8 PHR 0.77 PHR
Mar 9, 2018 250,001-518,399 2.7 PHR 1.8 PHR 0.5 PHR
Sep 11, 2018 518,400-1,036,798 2.16 PHR 1.44 PHR 0.4 PHR
Sep 6, 2019 >= 1,036,799 1.62 PHR 1.08 PHR 0.27 PHR

Both Proposals Approved

Date Block Height Masternode Reward Staking Reward Dev Budget
Current <= 775,600 4.2 PHR 2.8 PHR 1 PHR
Mar 9, 2019 775,601-1,043,999 2.7 PHR 1.8 PHR 1 PHR
Sep 11, 2019 1,044,000-1,562,398 2.16 PHR 1.44 PHR 1PHR
Sep 6, 2020 >= 1,562,399 1.62 PHR 1.08 PHR 1 PHR

Block Reward Proposal Approved ONLY

Date Block Height Masternode Reward Staking Reward Dev Budget
Current <= 775,600 4.2 PHR 2.8 PHR .77 PHR
Mar 9, 2019 775,601-1,043,999 2.7 PHR 1.8 PHR 0.5 PHR
Sep 11, 2019 1,044,000-1,562,398 2.16 PHR 1.44 PHR 0.4 PHR
Sep 6, 2020 >= 1,562,399 1.62 PHR 1.08 PHR 0.27 PHR

Development Funding Proposal Approved ONLY

Date Block Height Masternode Reward Staking Reward Dev Budget
Current <= 250,000 4.2 PHR 2.8 PHR 1 PHR
Mar 9, 2018 250,001-518,399 2.7 PHR 1.8 PHR 1 PHR
Sep 11, 2018 518,400-1,036,798 2.16 PHR 1.44 PHR 1 PHR
Sep 6, 2019 >= 1,036,799 1.62 PHR 1.08 PHR 1 PHR

We have identified some potential pros and cons of the change proposals which we have outlined below. We welcome all comments, questions and feedback in the forum below as we make this decision together.


  1. Keeping Higher Masternode and Staking Rewards. Masternode and Proof-of-Stake are very popular given the built in rewards (passive income) for investing and holding the currency and participating in the blockchain validation process. People are worried that when the ROI% decreases for both masternode owners and stakers, it could cause investors to sell and look for other masternode coins with higher ROIs. Lowering the population and decentralization of masternodes could weaken the Phore network compared to the very strong and growing trend of Phore Masternodes we have seen to date.

    With these changes, the incentives and ROI for participating in the Phore network will be higher for an additional 12 months, and may increase the attractiveness and value of Phore to many current and future investors. This could make the idea of buying and holding Phore more attractive to many potential investors.

  2. Maintaining/Increasing the Development Budget. Cryptocurrencies are a competitive space and we need to be able to attract and retain the best talent to be successful. The Phore roadmap is very ambitious and will require a significant team of skilled blockchain developers, a solid marketing team, and advisors providing guidance and support as we expand the Phore user base and roll out these additional products and capabilities. There was no ICO or developer pre-mine to fund Phore’s initial build out–100% of the project budget comes from these block rewards.

    The 2018 Roadmap milestones are a lot of work. SegWit, two mobile wallets and a web wallet, hardware wallet integration, the marketplace launch, crowdfunding, implementing sidechain support, adding a complete programmable smart contracts blockchain which is really like another complete coin launch with the added complexity of supporting smart contracts, we are talking about a lot of work by a lot of really talented people to get this done. There may be other expenses needed as well for things like legal advice, marketing whether online or at cryptocurrency trade shows, or fees for things like hardware wallet or exchange integration, which can sometimes be substantial (e.g., Ledger’s “altcoin package” is currently listed at 149,000 Euros with custom engraved Phore Ledger Nano S units, or 50,000 Euros for integration only).

    Keeping the development budget the same will preserve the current budget through this period, and a modest increase to the total supply will provide the ability to compensate additional resources and accelerate the Phore vision. Without maintaining or increasing the development budget, it would limit our ability to attract top talent to “work” on Phore, and existing resources working tons of hours and producing incredible results who are paid through the development budget would get significantly less once the block reward changes take effect.

  3. Increased Liquidity. Phore’s vision is to be used globally and to be accessible to everyone–we want it to be easy to acquire, trade, sell, and hold in as many places as possible. Phore is in active discussions to be listed on much higher volume exchanges, and plans to expand the user base dramatically with the rollout of the Phore Marketplace and later this year with both Crowdfunding and Smart Contracts. One of the key questions both individual and institutional investors ask about is liquidity–how easily can a large investment be bought or sold quickly without significantly moving the price. While no one on the team believes we would want to massively increase the existing supply, a modest increase in supply could alleviate some of these concerns.


  1. Increased Total Supply. While some of the points above argue the merits of a modest increase to the very small relative supply of Phore today, we should also consider potential risks.

    There are multiple factors that affect supply given the PoS and transaction fee structure of Phore. All transaction fees, budget proposal fees, etc. are burned, reducing the total supply, and with the success of the marketplace, transaction volume could rise dramatically. The budget proposals may not use all the available budget depending on what is voted for or against.

    Leaving out those reductions in supply though, we can project what the difference in total supply would be based on the block rewards added:

Phore Total Supply Projections

Jan 22nd, 2018

Block: 183,217

Jan 22nd, 2019

Block: 708,817

Jan 22nd, 2020

Block: 1,234,417

Current Block Reward Structure




Extend Current Block Rewards




Extend & Set Dev Budget to 1 PHR




As you can see from the table above, the changes are not a particularly large increase over the baseline, even over a 2 year time span. By the 3rd year, the block rewards go back to the same rate in all scenarios–the inflation percentage would actually be slightly lower with the increased supply. Nevertheless, it is an increase, and one factor some investors like is the low supply of Phore relative to other coins.

Phore would still currently be at a much smaller market cap and total supply than many privacy and masternode coins, and these changes would not really change Phore’s relative position in this comparison. Also, the additional Phore rewards are all being paid out to stakers, Masternode owners, and the development budget, so the existing Phore community is being directly compensated equal to the increased supply.

  1. Changing coin parameters. There will always be some people trying to spread Fear, Uncertainty, and Doubt (FUD) for every cryptocurrency, whether from competing projects or others in the broader cryptocurrency community, and there is little doubt that someone may argue that Phore is doing something wrong by changing the initial parameters for block rewards set out at the beginning. However, many coins, especially those dependent on block rewards for incentives have done similar things.

    PIVX is currently increasing their block rewards from 5 to 6 including doubling their development budget, and that is after starting with a MUCH higher block reward structure–50 PIV until block 302,399, dropping gradually 5 PIV at a time, and not getting down to the current 5 PIV (their lowest) until block 648,000–over a full year after their initial launch. Particl built a “primary funding round” right into their Q1 2018 roadmap, following the seed funding round they already completed.

Please provide your comments and feedback on these options below, as we really want to hear from the Phore community on this. If there are additional significant pros and cons we can add them to the list above.

Proposals for Voting

Based on community feedback, we are submitting two separate proposals in the Phore budget governance system:

ExtendBlockReward - This is for extending the current block rewards 12 months

1PHRDevFund - This changes the development budget to 1 PHR

Based on the way our governance system operates, for either of these proposals to gain approval, it will require at least 10% of the Masternodes (51 at last count based on 506 total Masternodes as of Jan. 28th) to vote Yes to the proposal, after subtracting any No votes.

If that margin is not reached, we will keep the current block reward schedule including the scheduled decrease to 5 PHR total block rewards split into masternodes, staking, and development budget.

Thanks very much for your consideration of this important decision.

I agree that the current block rewards model should be changed, however I don’t necessarily agree with your propositions. I have made some exemples in Excel of what I consider to be good rebalances of the block rewards.
My favorite rebalance is the first one (in blue).
I’d like to hear what you guys think.

For the reference, here is the current block rewards allocation:

Excuse me, please, but I did not understand how to vote for the variant in which both proposals were fulfilled, namely, the fee for developers up to 1 PHR and 518,400-1,036,798

What should I specify on my command line for voting for both these options?

Both Proposals Approved

Date Block Height Masternode Reward Staking Reward Dev Budget
Current <= 775,600 4.2 PHR 2.8 PHR 1 PHR
Mar 9, 2019 775,601-1,043,999 2.7 PHR 1.8 PHR 1 PHR
Sep 11, 2019 1,044,100-1,562,398 2.16 PHR 1.44 PHR 1PHR
Sep 6, 2020 >= 1,562,399 1.62 PHR 1.08 PHR 1 PHR