The Solana community is debating SIMD-228, a governance proposal that will reshape the network’s tokenomics by introducing a dynamic, market-driven emissions model for SOL tokens.
SIMD-228 is authored by Tushar Jain and Vishal Kankani of Multicoin Capital, with support from Max Resnick, lead economist at Anza, a key player in Solana's development ecosystem.
It proposes a market-driven emissions model that adjusts the issuance of new SOL tokens (inflation rate) based on the percentage of the total SOL supply that is staked.
The key objective is to incentivize staking participation to maintain network security while reducing overall inflation compared to the current fixed schedule.
This proposal seeks to replace Solana's fixed inflation schedule — currently set at 4.6% annually, decreasing by 15% each year until stabilizing at 1.5% — with a system that adjusts emissions based on staking participation.
If the proposal is approved, estimates suggest that under the current 65% staking rate, the new inflation rate could drop below 1% annually. If staking participation post-implementation drops to the 33% threshold, the inflation rate will adjust upward to incentivize staking.
If the percentage of staked SOL drops below the target 33% threshold, the emissions rate increases. With a high staking rate, rewards decrease, reflecting that the network doesn’t need to "overpay" for security, thus reducing inflation. However, the proposal may impact the profitability of stakers and validators, especially smaller ones.
Meanwhile, proponents argue that Solana's thriving economic activity justifies evolving its monetary policy, explaining that lower emissions during high staking could make SOL scarcer and more valuable, benefiting long-term holders. As such, it could drastically reduce inflation and prevent the annual value leakage of hundreds of millions.
The proposal is expected to undergo voting in epoch 743, which is expected to begin over the weekend.
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