GM everyone! Over the last several months, the Foundation has been actively working on scaling the demand side for Fizz Nodes. While the supply from the community has been incredible, the actual paid usage of retail GPUs and CPUs has remained extremely low. Only a very small group of users are willing to run workloads on retail-grade machines, and most new AI startups now prefer compliant, enterprise-grade GPUs due to increasing regulatory requirements across different regions.

This creates a structural challenge:

Fizz Nodes, in their current form, are not generating meaningful revenue for the network or the Foundation. Despite this, the protocol continues issuing liveness rewards to these nodes, which creates constant token inflation and sell pressure, without any corresponding economic value being created. At the same time, the Foundation is investing heavily on the sales side and needs to allocate more resources toward onboarding enterprises and scaling the pipeline.

Given this imbalance, the Foundation proposes the following:

1. Pause All Fizz Node Liveness Rewards

All FN liveness rewards and Season 2 FN points will be paused permanently upon passing of this proposal. The snapshots for Season 2 FN points have already been taken at the time of floating this proposal. No new FN points will be issued.

2. Transition Fizz Nodes to an On-Demand Payment Model

Fizz Nodes will continue to exist in the network and remain available for any GPU or CPU demand. However, instead of receiving passive liveness rewards, node operators will now earn only when their machines are used. They will receive instant, direct payment based on the workloads executed on their hardware. This eliminates idle inflation and aligns rewards with real economic activity.

3. Season 2 FN Rewards Allocation

A separate governance proposal will follow to allocate a percentage of token supply to Season 2 FN contributors and to SP holders based on the snapshots already taken. This ensures everyone who contributed early still receives fair recognition for supporting the network’s growth.

4. SP Nodes Will Continue as Normal

SP (Service Provider) nodes, which consist of high-end, data center–grade GPUs, are essential for onboarding enterprise customers. SP points will continue, and a future proposal will be introduced encouraging SP holders to stake their tokens to further secure the network. To date, no SP point holder has sold any tokens on the open market, showing strong alignment with long-term network success.

Why This Change?

FN rewards currently generate inflation without revenue

Retail GPUs face low demand due to compliance requirements Sell pressure increases while the Foundation cannot support buybacks without revenue The network needs to move to a sustainable, demand-driven economic model Resources must be reallocated to enterprise sales, partners, and real usage growth Fizz Nodes still matter — they provide retail compute when demand arises — but rewarding idle supply is no longer sustainable.

Voting Options 🟩 YES — Approve the Proposal

Pause FN liveness rewards End Season 2 FN points Shift Fizz Nodes to on-demand payments Move forward with Season 2 allocation proposal

🟥 NO — Reject the Proposal

Continue inflating token supply with FN liveness rewards Maintain the current model despite low usage Keep sell pressure and misaligned incentives

This proposal is the first step toward building a sustainable, demand-backed compute network and giving the Foundation the space to scale sales volume and create long-term value for SPON.