diff --git a/src/cryptonote_config.h b/src/cryptonote_config.h
index c6aa064cf..b042088bd 100644
--- a/src/cryptonote_config.h
+++ b/src/cryptonote_config.h
@@ -118,6 +118,7 @@ namespace config
   uint64_t const DEFAULT_FEE_ATOMIC_XMR_PER_KB = 500; // Just a placeholder!  Change me!
   uint8_t const FEE_CALCULATION_MAX_RETRIES = 10;
   uint64_t const DEFAULT_DUST_THRESHOLD = ((uint64_t)10000000000); // pow(10, 10)
+  uint64_t const BASE_REWARD_CLAMP_THRESHOLD = ((uint64_t)100000000); // pow(10, 8)
   std::string const P2P_REMOTE_DEBUG_TRUSTED_PUB_KEY = "0000000000000000000000000000000000000000000000000000000000000000";
 
   uint64_t const CRYPTONOTE_PUBLIC_ADDRESS_BASE58_PREFIX = 18;
diff --git a/src/cryptonote_core/blockchain.cpp b/src/cryptonote_core/blockchain.cpp
index 4609fc137..1fdb7e24a 100644
--- a/src/cryptonote_core/blockchain.cpp
+++ b/src/cryptonote_core/blockchain.cpp
@@ -981,6 +981,14 @@ bool Blockchain::validate_miner_transaction(const block& b, size_t cumulative_bl
             return false;
         }
     }
+    else
+    {
+        // from hard fork 2, since a miner can claim less than the full block reward, we update the base_reward
+        // to show the amount of coins that were actually generated, the remainder will be pushed back for later
+        // emission. This modifies the emission curve very slightly.
+        CHECK_AND_ASSERT_MES(money_in_use - fee <= base_reward, false, "base reward calculation bug");
+        base_reward = money_in_use - fee;
+    }
     return true;
 }
 //------------------------------------------------------------------
@@ -1099,7 +1107,7 @@ bool Blockchain::create_block_template(block& b, const account_public_address& m
      block size, so first miner transaction generated with fake amount of money, and with phase we know think we know expected block size
      */
     //make blocks coin-base tx looks close to real coinbase tx to get truthful blob size
-    bool r = construct_miner_tx(height, median_size, already_generated_coins, txs_size, fee, miner_address, b.miner_tx, ex_nonce, 11);
+    bool r = construct_miner_tx(height, median_size, already_generated_coins, txs_size, fee, miner_address, b.miner_tx, ex_nonce, 11, m_hardfork->get_current_version());
     CHECK_AND_ASSERT_MES(r, false, "Failed to construc miner tx, first chance");
     size_t cumulative_size = txs_size + get_object_blobsize(b.miner_tx);
 #if defined(DEBUG_CREATE_BLOCK_TEMPLATE)
@@ -1108,7 +1116,7 @@ bool Blockchain::create_block_template(block& b, const account_public_address& m
 #endif
     for (size_t try_count = 0; try_count != 10; ++try_count)
     {
-        r = construct_miner_tx(height, median_size, already_generated_coins, cumulative_size, fee, miner_address, b.miner_tx, ex_nonce, 11);
+        r = construct_miner_tx(height, median_size, already_generated_coins, cumulative_size, fee, miner_address, b.miner_tx, ex_nonce, 11, m_hardfork->get_current_version());
 
         CHECK_AND_ASSERT_MES(r, false, "Failed to construc miner tx, second chance");
         size_t coinbase_blob_size = get_object_blobsize(b.miner_tx);
diff --git a/src/cryptonote_core/cryptonote_format_utils.cpp b/src/cryptonote_core/cryptonote_format_utils.cpp
index 537e4408b..d40a1ef7f 100644
--- a/src/cryptonote_core/cryptonote_format_utils.cpp
+++ b/src/cryptonote_core/cryptonote_format_utils.cpp
@@ -105,7 +105,7 @@ namespace cryptonote
     return true;
   }
   //---------------------------------------------------------------
-  bool construct_miner_tx(size_t height, size_t median_size, uint64_t already_generated_coins, size_t current_block_size, uint64_t fee, const account_public_address &miner_address, transaction& tx, const blobdata& extra_nonce, size_t max_outs) {
+  bool construct_miner_tx(size_t height, size_t median_size, uint64_t already_generated_coins, size_t current_block_size, uint64_t fee, const account_public_address &miner_address, transaction& tx, const blobdata& extra_nonce, size_t max_outs, uint8_t hard_fork_version) {
     tx.vin.clear();
     tx.vout.clear();
     tx.extra.clear();
@@ -125,6 +125,15 @@ namespace cryptonote
       LOG_PRINT_L0("Block is too big");
       return false;
     }
+
+    // from hard fork 2, we cut out the low significant digits. This makes the tx smaller, and
+    // keeps the paid amount almost the same. The unpaid remainder gets pushed back to the
+    // emission schedule
+    if (hard_fork_version >= 2)
+    {
+        block_reward = block_reward - block_reward % ::config::BASE_REWARD_CLAMP_THRESHOLD;
+    }
+
 #if defined(DEBUG_CREATE_BLOCK_TEMPLATE)
     LOG_PRINT_L1("Creating block template: reward " << block_reward <<
       ", fee " << fee)
diff --git a/src/cryptonote_core/cryptonote_format_utils.h b/src/cryptonote_core/cryptonote_format_utils.h
index 3b1f7ef3d..202919822 100644
--- a/src/cryptonote_core/cryptonote_format_utils.h
+++ b/src/cryptonote_core/cryptonote_format_utils.h
@@ -44,7 +44,7 @@ namespace cryptonote
   crypto::hash get_transaction_prefix_hash(const transaction_prefix& tx);
   bool parse_and_validate_tx_from_blob(const blobdata& tx_blob, transaction& tx, crypto::hash& tx_hash, crypto::hash& tx_prefix_hash);
   bool parse_and_validate_tx_from_blob(const blobdata& tx_blob, transaction& tx);
-  bool construct_miner_tx(size_t height, size_t median_size, uint64_t already_generated_coins, size_t current_block_size, uint64_t fee, const account_public_address &miner_address, transaction& tx, const blobdata& extra_nonce = blobdata(), size_t max_outs = 1);
+  bool construct_miner_tx(size_t height, size_t median_size, uint64_t already_generated_coins, size_t current_block_size, uint64_t fee, const account_public_address &miner_address, transaction& tx, const blobdata& extra_nonce = blobdata(), size_t max_outs = 1, uint8_t hard_fork_version = 1);
   bool encrypt_payment_id(crypto::hash8 &payment_id, const crypto::public_key &public_key, const crypto::secret_key &secret_key);
   bool decrypt_payment_id(crypto::hash8 &payment_id, const crypto::public_key &public_key, const crypto::secret_key &secret_key);