Multicoin Capital has submitted proposal SIMD-0228 for a variable-rate token emission system for Solana, aimed at reducing inflation.
Goals of the New Proposal
The SIMD-0228 proposal aims to implement a system where the issuance rate fluctuates based on the staking participation rate. If below 50%, new token issuance increases to encourage participation. If above, issuance is restricted.
Debate Over SOL Inflation
In May 2024, Solana validators voted for proposal SIMD-0096, removing the 50% fee-burning mechanism for priorities. Critics warned of increased SOL inflation, potentially benefiting validators but disadvantaging non-staking holders due to dilution effects.
Role of MEV and Future Steps
Data from StakingRewards shows 65% of SOL's circulating supply is staked. Jito's MEV solution exceeded $100 million in validator income by December 2024. Proponents argue MEV offers enough validator incentives, reducing the need for full priority fee allocation.
Proposal SIMD-0228 is part of Solana's continuous efforts to optimize its economic model, ensuring fair reward distribution while minimizing inflation.
