This governance proposal requests the Chiliz Chain community to approve a rebalancing of the internal distribution structure within the Community Vault bucket — one of the three allocation tiers defined under Tokenomics 2.0 (Dragon8 / Pepper8 upgrades).
Under the current Pepper8 parameters, the Community Vault receives 10% of all inflationary CHZ emissions. This proposal specifies how those funds are distributed internally across three sub-buckets for Q2 2026 (April 1 — June 30, 2026).
Proposed Sub-Allocation (Community Vault 10%)
| Recipient Bucket | Current (Q1 2026) | Proposed (Q2 2026) | Change |
|---|---|---|---|
| Active Governance Participants | 25% | 40% | +15% |
| CHZ Liquidity Pool Incentives (DEX LPs) | 45% | 35% | −10% |
| Shared Security Restaking Rewards | 30% | 25% | −5% |
The top-level inflation allocation (65% Validators/Delegators · 10% Community Vault · 25% Ecosystem & Operations) remains unchanged and is not affected by this proposal.
Chiliz Chain Tokenomics 2.0 Context
The Pepper8 hard fork (August 2025) finalized Tokenomics 2.0, introducing a gradually decaying annual inflation model starting at 8.80% in Year 1 and stabilising at 1.88% from Year 14. A protocol-level EIP-1559 burn mechanism partially offsets inflationary pressure over time.
The three top-level allocation tiers are designed to balance network security (Validators), community growth (Community Vault), and long-term development (Ecosystem & Operations). The Community Vault sub-allocation, however, was not rigidly specified in the Pepper8 upgrade — creating a governance opportunity for the community to direct these funds each quarter.
Why Increase Governance Participant Rewards?
- Q1 2026 data shows governance participation increased 34% YoY, but the reward share did not reflect this growth, creating a misalignment between contribution and incentive.
- Increasing rewards for governance voters directly strengthens decentralisation by incentivising broader participation in on-chain decision-making.
- Aligns with the Chiliz Manifesto 2026–2030 goal of building a community-first SportFi financial infrastructure.
- Fan Token holders across 70+ sporting organisations represent a vast, relatively untapped governance base — targeted incentives can mobilise this community.
Why Reduce LP & Restaking Shares?
- CHZ DEX liquidity on Chiliz Chain native protocols has stabilised with TVL reaching a sustainable baseline in Q1 2026, reducing the marginal impact of additional LP incentives.
- Shared Security Restaking is still in an early bootstrapping phase; a modest reduction allows for future scaling as validator participation grows.
- A 5–10% intra-vault shift is considered within normal governance adjustment bounds and does not introduce systemic risk to network security.
Implementation
If this proposal passes, the Chiliz Chain Foundation multisig will update the on-chain Community Vault distribution parameters at the start of Block Epoch Q2 2026 (approximately Block 44,800,000).
Affected Parameters
communityVault.governanceShare: 0.25 → 0.40communityVault.lpIncentiveShare: 0.45 → 0.35communityVault.restakingShare: 0.30 → 0.25
Duration & Review
These parameters will apply for Q2 2026 (April 1 — June 30). A follow-up governance vote (CHZ-GIP-010) may adjust allocations for Q3 2026 based on observed participation metrics and community feedback.
Eligibility Criteria for Governance Rewards
- Wallet must hold ≥ 100 CHZ at the block snapshot date for each governance proposal.
- Wallet must have voted on ≥ 1 governance proposal within the Q2 2026 period.
- Rewards are distributed proportionally to CHZ balance at snapshot, weighted by number of votes cast.
- Unclaimed rewards after 90 days are returned to the Community Vault for the next quarter.
