At present, the Solana proposal known as SIMD-0228, which has the potential to significantly reduce SOL’s inflation rate, has garnered the support of 37.8% of the network validators.
According to Dune Analytics, out of the total 1334 active validators, 746 validators have cast their votes on the proposal, representing nearly 58% of the total. Of these voters, 37.8% were in favor of the proposal, 18.5% were against it, and 1.2% abstained from voting. As of the current status, the proposal appears to be heading towards failure. The voting period ends at Epoch 755, expected to be reached in approximately 11 hours.
The proposal advocates for a market-based token emission mechanism to prevent the network from overspending on security. It is anticipated to have positive implications for Solana’s decentralized finance sector and enhance liquidity in onchain SOL markets.
“Since 2023, the Solana network has undergone significant transformations. From daily on-chain volumes below $100 million, the ecosystem has now consistently achieved billions in daily on-chain volume, indicating a remarkable evolution. Given this progress, we believe that now is the ideal time to align the inflation rate with SIMD-228,” stated Logan Jastremski, co-founder and managing partner at frictionless Capital.
Estimates suggest that the proposal could potentially reduce SOL’s inflation rate from 4.5% to around 0.87%, representing an 80% decrease. Tagus Capital anticipates a positive impact on SOL’s price if the proposal is approved.
“Approval of the proposal could lead to a significant reduction in staking rewards and fresh SOL supply, potentially increasing its value. However, the decrease in rewards may result in smaller validators exiting, raising concerns about network decentralization,” the firm cautioned in a recent newsletter.
