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HomeNewsSolana's Governance Proposal: Pioneering Economic Shifts to Combat Token Inflation

Solana’s Governance Proposal: Pioneering Economic Shifts to Combat Token Inflation

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  • Multicoin Capital’s SIMD-0228 might shift $SOL towards becoming a deflationary asset, boosting its market value.
  • Adjustable ‘Smart Emissions’ based on staking levels could promote network security and economic stability.

A groundbreaking proposal submitted by executives from Multicoin Capital could redefine economic strategies on the Solana blockchain by potentially shifting $SOL towards becoming a deflationary asset.

The proposal, identified as SIMD-0228, suggests a novel emission schedule aimed at optimizing blockchain economics while curbing the prevalent inflationary trends.

Exploring SIMD-0228: A Paradigm Shift in Blockchain Economics

The initiative stems from an observed decrease in validators’ dependency on staking emissions, courtesy of Solana’s burgeoning economic activities and MEV rewards. This observation has catalyzed a reevaluation of the emission strategies to better align with the network’s current and future economic states.

SIMD-0228 introduces a concept known as ‘Smart Emissions.’ This approach dynamically adjusts the emission rates based on the actual participation of stakers.

Ultra-Sound SOL
According to Blockworks data

Specifically, the proposal details a mechanism where emission rates will escalate when the staked percentage of $SOL dips below 50%, aiming to enhance network security and incentivize staking. 

“With the current staking participation rate of ~70%, the network would see a reduction of inflation of 1% p.a.” – SIMD-0228

Conversely, when over 50% of $SOL is staked, the emission rates will drop, fostering more sustainable economic conditions and supporting the utility of $SOL within DeFi ecosystems.

SOLUSDT_2025-01-17_11-36-08
Source: Tradingview

Solana (SOL) is currently trading at $220.09, reflecting a 5.27% increase in the last 24 hours. Its market capitalization stands at $107.09 billion, with a 24-hour trading volume of $5.27 billion, marking a 9.54% increase. The circulating supply is 486.6 million SOL, with no fixed maximum supply.

SOLUSDT_2025-01-17_11-37-58
Source: Tradingview

From a technical perspective, Solana is testing key resistance at $220 – $225. If it breaks above this range, the next upside targets could be $230 – $240. On the downside, critical support lies at $200 – $210, with further support at $180 if retracement occurs.

With growing institutional adoption, continuous ecosystem expansion, and strong technical fundamentals, Solana remains well-positioned for long-term growth. However, a sustained breakout above $225 is necessary to confirm continued bullish momentum.

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Isai Alexei
Isai Alexei
As a content creator, Isai Alexei holds a degree in Marketing, providing a solid foundation for the exploration of technology and finance. Isai's journey into the crypto space began during academic years, where the transformative potential of blockchain technology was initially grasped. Intrigued, Isai delved deeper, ultimately making the inaugural cryptocurrency investment in Bitcoin. Witnessing the evolution of the crypto landscape has been both exciting and educational. Ethereum, with its smart contract capabilities, stands out as Isai's favorite, reflecting a genuine enthusiasm for cutting-edge web3 technologies. Business Email: [email protected] Phone: +49 160 92211628
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