tl;dr
A new Solana proposal, SIMD-0228, aims to change the frequency of token generation on the blockchain by moving from fixed-rate token emissions to a programmatic, market-based emission schedule based on staking participation rate. The proposal has sparked debate, with proponents arguing that dynamic ...
A new Solana proposal, SIMD-0228, aims to change the frequency of token generation on the blockchain by moving from fixed-rate token emissions to a programmatic, market-based emission schedule based on staking participation rate. The proposal has sparked debate, with proponents arguing that dynamic emissions will benefit the network and stakers, while opponents express concerns about potential negative impacts on decentralization and security.
Notable figures, including Solana Labs co-founder Anatoly Yakovenko, have expressed support for the proposal, while others, such as Solana Foundation President Lily Liu, have spoken out against it, favoring fixed rates for predictability in capital markets. Voting on the proposal is set to take place during Solana Epoch 753, with expectations of a close vote and ongoing efforts to rally support for or against the proposal.
The proposal, also known as SIMD-0228, looks to move from fixed-rate token emissions to a programmatic, "market-based emission" schedule that is based on staking participation rate. Instead of decreasing Solana inflation based on a fixed, time-based schedule, SIMD-0228 proposes that Solana inflation dynamically changes based on network activity. The proposal's authors believe that so-called smart emissions would benefit the network and stakers by reducing inflation, spurring DeFi usage, reducing sell pressure, and improving the narrative around its existing inflation.
Notable Solana builders and personalities, including Solana Labs co-founder Anatoly Yakovenko, have signaled support for the proposal as well. Helius Labs CEO Mert Mumtaz added that the "strongest argument for 228 is that it incentivizes and speeds up the timeline towards a network centered on real economic value."
But not all of the Solana community is ready to accept the proposal, which has been modified in the last two months based on feedback. As the proposal inches closer to a vote, some builders have taken aim at elements they believe will negatively impact the ecosystem. One such dissenting opinion comes from SolBlaze.org, a Solana network validator that will have the option to vote on the proposal. The validator expressed concerns that SIMD-0228 will "drastically decrease" the amount of Solana tokens staked, thus threatening decentralization and the security of the network while impacting Solana's DeFi protocols, which rely on staking rewards.
Others, including Solana Foundation President Lily Liu, have spoken out against the proposal, favoring fixed rates for predictability in capital markets.
Voting on SIMD-0228 is expected to start during Solana Epoch 753, with expectations of a close vote and ongoing efforts to rally support for or against the proposal.