Presearch recently announced a reduction in node runner rewards, aiming to make the tokenomics of the project more sustainable. According to the CEO, the plan initially targeted a 20% reduction in rewards, though the actual reduction ended up being slightly less due to the complex nature of the reward calculation system.

The CEO explained that the equation used to determine node rewards has been in place for a long time and is unnecessarily complicated. This complexity, combined with the random elements affecting node activity (such as the number of searches each node processes), makes it difficult to predict exact payouts. While the team acknowledges that the system shouldn't be overly complex, a simple solution isn't feasible at this point due to a lack of development time.

As a result, Presearch is implementing an approximate reduction over the next four to five months. This will eventually lower the monthly token payout by about 1.5 million tokens, bringing the total payout down to just over 3 million tokens per month.

The CEO informs that this reduction is necessary for the long-term sustainability of the project. The CEO highlighted that the community is divided into two groups: those concerned with the health of the company and those focused on individual profitability. Presearch's current payout rates were deemed too high, with the project previously being funded solely through token sales—a model that is not sustainable.

The CEO acknowledged that the equation used to calculate node rewards is outdated and unnecessarily complicated. This complexity makes it challenging to predict exact payouts, especially since the system includes random elements like how many searches a node processes. While the team recognizes that the system shouldn't be overly complex, simplifying it would require significant development resources, which are not available at the moment.  

By transitioning towards a more deflationary token model, the project aims to reduce token inflation and move towards a more balanced and healthy economy. The CEO assured that this reduction is just one part of the broader plan to manage tokenomics more effectively, with further efforts planned to address inflation and improve the overall economic structure of the platform.

As a result, Presearch is implementing an approximate reduction in rewards over the next four to five months. This gradual decrease will reduce the total monthly token payout by approximately 1.5 million tokens, bringing the overall payout down to just over 3 million tokens per month.

Disparities in Node Earnings

A notable concern raised by some node runners is the disparity in rewards based on the amount of PRE tokens staked. Early node operators with 1,000 PRE staked are reportedly earning a higher annual percentage rate (APR) of around 30%, while newer nodes with larger stakes, such as 4,000 PRE, are seeing much lower returns—around 12% APR. This discrepancy has led to frustration among node operators, especially those who entered the network later with higher stakes, as they feel penalized for their larger investments.

The CEO has not directly addressed this specific issue in recent statements, but the broader goal of reducing overall token inflation and moving toward a deflationary model remains central to the strategy. The disparity in rewards might be an unintended consequence of the current reward structure, adding to the complexity and randomness in the system.

The reward reduction is part of Presearch’s broader effort to transition to a more sustainable and profitable business model. The CEO emphasized that the current payout rate is too high to maintain in the long term. Previously, the project was largely funded by token sales, leading to significant inflation and an unsustainable economic model. To protect the overall health of the project and ensure its longevity, Presearch is moving toward a deflationary approach, aiming to stabilize token value and reduce inflation over time.  

What about node runners?

The reduction in rewards, coupled with the disparity in APR between early and late node operators, has sparked mixed reactions within the community. Some node runners, especially those affected by the lower returns on larger stakes, are likely to feel discontented, seeing this as a devaluation of their contributions. Others, particularly those focused on the project's long-term success, might understand the necessity of these changes, viewing them as a necessary step toward ensuring Presearch’s sustainability.

In addition, the complexity of the reward calculation system could lead to demands for greater transparency or even a call for restructuring to create a more equitable and predictable payout system for all node runners, regardless of when they joined or how much they staked.  

Node runners may express frustration or disappointment, as a reduction in rewards lowers their financial incentive. For those who rely on consistent payouts, to keep their nodes running.

This reduction in rewards could feel like a devaluation of their efforts and resources invested in running nodes. These individuals may voice their concerns across social media and community forums, potentially citing fears of reduced profitability.

Depending on how drastic the reduction affect contributors, some node runners may choose to decrease their participation or explore other platforms with better rewards, especially if they feel their efforts are no longer adequately compensated. This could lead to a dip in network participation if enough runners decide to move on.

Presearch becoming a proprietary business

Presearch team in the past year is working to monetize the project and make it profitable—adding advertising and gambling partners to the platform. It is an attempt to make their own business sustain their jobs and efforts.

The decision to reduce rewards of newer nodes reflects the team’s dual focus: maintaining the long-term health of the platform while ensuring that the project remains financially viable. While some node runners might view the reduction as a threat to their earnings, the leadership believes it is essential for the future of the project.

The goal may not only be the long-term health of the project but also their own financial well-being. If the project thrives in the long run, the team can maintain their paychecks and livelihoods until some of them decide to exit and pursue new ventures.

Presearch’s reward reduction is just one part of a larger effort to ensure the platform’s sustainability by reducing inflation and aligning payouts with long-term economic goals. While node runners are likely to react with mixed feelings—some frustrated by reduced rewards and disparities, others understanding of the bigger picture—the ultimate success of this strategy will depend on the team’s ability to balance sustainability with profitability and to address community concerns moving forward.