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SOL supply in the crosshairs: Solana governance proposal stirs community
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A new governance proposal at Solana could drastically change token issuance SUN and make it a deflationary asset. The proposal SIMD-0228presented by the executives of Multicoin Capitalsuggests programmatic token issuance to optimize blockchain economics and reduce SOL inflation.
SIMD-0228 is a governance proposal developed by Tushal Jain and Vishal Kalkanifrom Multicoin Capital. The objective is to adapt the issuance of SUN based on validator participation and market dynamics. Currently, Solana’s inflation model starts from 8% per yeardecreasing 15% annually until stabilizing at 1.5% in 2030.
With the growing on-chain activity and the reduction of validators’ dependence on staking issuances, the proposal introduces the concept of “Smart Emissions”. This system dynamically adjusts the token issuance rate based on staker participation:
At the moment, 50% of transaction fees on Solana are burnedwhich reduces the total supply of tokens. However, this is still not enough to completely offset inflation.
Impact on Solana’s Economy
According to data from Blockworksthe burning rate of the SUN varies between 10% and 20% emissions, depending on the level of network activity. The SIMD-0228 proposal estimates that, with a 70% stakinginflation would be reduced by approximately 1% per yearrepresenting a drop in 20.9% in total token issuance.
If this trend continues and on-chain activity increases, the SOL could become a deflationary assetreducing selling pressure and valuing the cryptocurrency in the long term.
The SIMD-0228 proposal received strong support from influential figures on the Solana network, such as the engineer at Anza, trent.sol. Many ecosystem participants believe that reducing inflation will strengthen the adoption and value of $SOL, improving its position against other cryptoassets.
With the introduction of this new programmatic issuance model, Solana can move closer to the narrative of “Ultra-Sound Money” of Ethereum, which seeks deflation by burning transaction fees.
SOL supply in the crosshairs: Solana governance proposal stirs community
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SOL supply in the crosshairs: Solana governance proposal stirs community
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SOL supply in the crosshairs: Solana governance proposal stirs community
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SOL supply in the crosshairs: Solana governance proposal stirs community