2025-03-07
SIMD-228 is a proposal by Tushar Jain
and Vishal Kankani from Multicoin Capital.
It aims to change how new SOL tokens
are created by adjusting the inflation rate based on how much SOL is staked.
The goal is to keep at least 50% of the
tokens staked to improve network security.
Current System
Right now, Solana follows a fixed
inflation schedule that starts at 8% and decreases by 15% per year. By 2030, it
will reach a final rate of 1.5%
This system does not adjust based on
network conditions or staking levels.
What SIMD-228 Proposes?
Instead of a fixed schedule, the
inflation rate will change dynamically.
If staking drops below 50%, the
inflation rate increases to encourage more staking
If staking is above 50%, the inflation
rate decreases, reducing the number of new tokens created
The inflation rate will range from 0%
to the current emission curve.
Potential Impact
A more efficient and responsive
economic model. Could reduce inflation while keeping the network secure.
Encourages more people to stake their SOL.
Community Debate and Voting
The Solana community is discussing
whether to approve this proposal.
If approved, it could lower inflation
below 1% annually under current staking rates. If staking falls below 33%, the
inflation rate will increase to encourage staking.
The voting is expected to take place in
epoch 753 (possibly this weekend).
Supporters
Solana co-founder Anatoly Yakovenko and
Helius founder Mert Mumtaz believe it will strengthen the network and
make SOL more valuable.
Critics
Solana Foundation President Lily Liu, worries
it could make staking rewards unpredictable, discouraging institutional
investors.
The proposal has been discussed for two
months, with various inputs from the community. The decision will shape how
Solana's token system works in the future.
