Solana tokenomics may change after inflation model revision
How Solana will change
The Solana community is actively discussing Solana Improvement Document (SIMD-0228), a governance proposal that could reshape SOL’s tokenomics by introducing a dynamic, market-driven inflation model.
The initiative was proposed by Tushar Jain and Vishal Kankani from Multicoin Capital, with support from Max Resnick, the lead economist at Anza, a key player in Solana’s ecosystem.
The proposal suggests replacing the current fixed inflation schedule (set at 4.6% annually, decreasing until it stabilizes at 1.5%) with an adaptive emission system where inflation adjusts based on the percentage of staked SOL tokens.
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If staked SOL falls below 33%, the emission rate increases to encourage staking. Conversely, if staking participation is high, rewards decrease, reducing inflation and preventing overpayment for network security. However, this change may impact the profitability of validators and delegators, particularly smaller participants.
Why change Solana’s tokenomics?
Supporters argue that Solana’s growing economic activity necessitates an updated monetary policy. They believe that lower emissions during high staking participation will make SOL scarcer and more valuable, benefiting long-term holders. This could drastically cut inflation and prevent hundreds of millions of dollars in annual value leakage.
If approved, the new model could bring inflation below 1% annually at the current 65% staking rate. If participation drops to 33%, emissions will increase to incentivize staking.
The SIMD-0228 vote is expected to take place this weekend. Meanwhile, Solana leadership continues debating the proposal and has invited community input. Solana co-founder Anatoly Yakovenko has already expressed support, alongside Helius founder Mert Mumtaz.
"I believe SIMD-228 should pass because it will make the network stronger," Mumtaz emphasized. He added that even if the proposal is rejected, the extensive public discussion will benefit the ecosystem.
However, Solana Foundation President Lily Liu voiced skepticism, urging a more thorough review of the inflation model. In an X post, she called SIMD-0228 “half-baked,” warning that unstable staking yields could deter institutional investors.
Authors Vishal Kankani and Max Resnick defended the proposal, stating that it has undergone nearly two months of discussion since January and has incorporated various perspectives from the community.
Meanwhile, Solana Labs co-founder Anatoly Yakovenko spoke against the creation of a U.S. cryptocurrency reserve, arguing that state control over digital assets would undermine the decentralized principles at the core of blockchain technology.
