Streamlining Governance & Funding: The Next Chapter for WAX Blockchain

5 min readMar 31, 2025

The WAX Blockchain is entering a new phase of evolution, focused on improving governance, enhancing funding efficiency, and ensuring long-term sustainability, reducing inflation from 5% to 4%. With a streamlined model for validator compensation and ecosystem growth, these updates aim to better align the protocol with emerging trends and reinforce WAX’s role as a robust, developer-friendly platform.

A Look Back: How We Got Here

Since its introduction in 2019, the Office of Inspector General (OIG) has helped WAX build a reliable governance framework, ensuring that infrastructure remained secure, validators delivered value, and Guilds — also known as Block Producers — were rewarded fairly for their contributions.

Guilds have served as the backbone of the network, producing blocks and developing essential tools like marketplaces, decentralized exchanges (DEXs), and digital collectibles. In times of rapid growth, especially during the last bull run, expectations expanded. Guilds were encouraged not only to run infrastructure but also to build products, contribute code, and help grow the ecosystem.

To support these added responsibilities, the Guild Rewards Parachute was introduced during the bear market, giving active contributors more flexibility in covering operating costs.

But now, with the industry maturing and new funding models becoming more efficient, WAX is shifting gears.

What’s Changing — and Why

To simplify operations and sharpen focus, WAX will do the following:

Transition ecosystem product development funding to WAX Labs
Refocus Guild compensation on technical infrastructure only
Phase out the Guild Rewards Parachute over six months beginning in April 2025

This update makes way for a more transparent, scalable, and decentralized funding model. WAX Labs will now become the central hub for grants — supporting infrastructure, tools, maintenance, and new products.

Meanwhile, Block Producer responsibilities will be limited to validation and maintaining a minimal set of critical infrastructure. Active Block Producers will remain to be funded by 1% inflation. The number of Standby Block Producers will be reduced to six, and rewards adjusted accordingly. Along with a slight reduction to WAX Labs, these changes will bring the overall network inflation down from 5% to 4%.

Updated Inflation Breakdown:

1%: Block Producer Rewards
0.15%: Standby Block Producer Rewards
0.85%: WAX Labs
2%: Staking and Voting Rewards

By separating core infrastructure responsibilities from broader ecosystem contributions, these changes allow for better specialization, open the door for new teams to contribute, and keep funding aligned with the evolving needs of WAX.

Evolving WAX Labs

WAX Labs will undergo a management refresh to improve transparency and responsiveness. To better support the ecosystem, WAX Labs grants will now also cover for-profit projects and infrastructure service contracts.

Grants will fund key components like Hyperion history nodes and AtomicAssets APIs through a transparent bidding system, allowing more Guilds to contribute critical services while ensuring the network runs efficiently.

Looking Ahead

By October 2025, the OIG and WAX Team will introduce a new on-chain evaluation framework for Guilds, focused on transparent, technical performance metrics. This system will include a voting weight multiplier to further reward high-performing contributors, with additional consideration for expertise, ecosystem involvement, and incident response.

These changes are designed to future-proof WAX while reinforcing its position as one of the most efficient, decentralized, and developer-focused blockchains in the world.

FAQ

Q: What is the schedule for the Guild Rewards Parachute phase-out?
A: The phase-out starts in April 2025 with a 4% reduction, followed by a 16% reduction at the end of each month through September. By October 2025, it will be fully phased out.

Q: I am a Guild. What infrastructure am I expected to maintain to continue operating?
A: Active Block Producers must maintain:

A Block Producer Node
RPC Node(s)
Oracle Scripts (e.g., Delphi, RNG)
Testnet Infrastructure

Q: I operate a product essential to WAX and currently rely on Guild rewards. How can I apply for a WAX Labs grant?
A: Contact the WAX Blockchain Team and/or OIG to schedule a discussion. You’ll need to submit a detailed proposal outlining your product, costs, and its benefit to the WAX ecosystem.

Q: Who is responsible for running Full History Nodes like Hyperion?
A: WAX Labs will manage a bidding system for Guilds to run this infrastructure. Agreements will be funded via WAX Labs grants and reviewed regularly.

Q: Who is responsible for running AtomicAssets NFT Standard indexer and APIs?
A: These services will be managed through WAX Labs via a similar bidding process, with grants and agreements tailored to each component.

Q: When are Guilds allowed to adjust redundant infrastructure?
A: The OIG will gradually adjust infrastructure requirements during the funding transition to WAX Labs.

Q: How will Block Producers be selected after the new system is introduced in October 2025?
A: A transparent, on-chain framework will evaluate technical metrics. Additional factors like ecosystem involvement and responsiveness may influence rankings. A voting weight multiplier will also be introduced.

Q: Is the funding for Active Block Producers changing?
A: No. The funding for Active Block Producers remains unchanged at 1% inflation.

These changes represent a major step forward in streamlining how WAX rewards contributors, distributes funding, and adapts to the evolving web3 landscape. Stay tuned — and as always, thank you for building the future with us.

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