Litecoin recently announced cutting miners’ block rewards in half. Titled Litecoin Halving, the initiative is set to take place on August 2, 2023. After the execution, Litecoin will bring down miners’ slash block rewards from 12.5 LTC to 6.25 LTC. This deflationary design will incentivize miners via block validation rewards. These rewards are issued after the blockchain adds a new block (approx. every 2.5 minutes).
Litecoin has scheduled the halving process to take place every four years (or 840k blocks). The process will remain functional until no more Litecoins are left to be mined. According to experts, this should be attained by the year 2142.
Originally, Litecoin used to reward the validators with 50 LTC tokens for every mined block. However, the rewards have been halved two times since then. The first halving took place in August 2015, and the next took place in August 2019.
Currently, the Litecoin network is creating around 7,200 new LTC tokens every day. The number will come down to 3,600 per day after the halving takes place. The event is crucial in moderating the issuance of new LTC tokens.
With the halving, the network makes sure that LTC’s inflation rate stabilizes over time. This puts deflationary pressure on the coin’s fixed supply, similar to BTC. As expected, the halving event has caught the attention of most crypto traders.
Most of them are reassessing their strategies based on the Litecoin price prediction. The coin is currently trading at $91.02 (at the time of writing), marking a 1.46% hike in the previous 24 hours. As the halving nears, the LTC price is also expected to make several fluctuations.
Once the halving event is concluded, the LTC inflation rate is expected to flow around 1.825%. Given the popularity of the coin, the event will be keenly followed by most crypto traders globally.