A new Solana proposal aims to change the frequency at which new tokens are generated on the prominent blockchain—and the suggested changes are generating serious debate ahead of the imminent vote.
This proposal is also called SIMD-0228The company is moving away from tokens with fixed rates to programmatic emissions. “market-based emission” Schedule that’s based on the stake participation rate.
SIMD-0228, on the other hand, proposes a dynamic change in Solana’s inflation rate based upon network activity, rather than a schedule based solely on time.
“The [current] mechanism is not aware of network activity, nor does it incorporate that to determine the emission rate. Simply put, it’s ‘dumb emissions,'” Read the proposal. “Given Solana’s thriving economic activity, it makes sense to evolve the network’s monetary policy with ‘smart emissions.'”
The proposal’s authors—Multicoin Capital’s Tushar Jain and Vishal Kankani, and Max Resnick, lead economist at Solana-focused R&D firm Anza—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.
Anatoly Yakovenko (co-founder of Solana Labs) and other notable Solana personalities have also expressed support for this proposal.
“The counter arguments to 228 are pretty bad because the cost of inflation is something on the order of […] $1-2 billion per year,” Yakovenko tweeted on X.
Helius Labs CEO Mert Momtaz also added that “strongest argument for 228 is that it incentivizes and speeds up the timeline towards a network centered on real economic value.” Chris Burniske also echoed that line of reasoning.
“I'm in favor of SIMD-228,” Burniske The following are some of the ways to get in touch with each other On X. “In the long run, real yield comes from what the demand-side leaks to the supply-side, and inflation is just a bootstrapping mechanism to get to that place.”
The proposal is not accepted by all members of the Solana group. This has been altered In the last two month based on feedback. As we get closer to the vote on this proposal, builders have targeted elements they think will negatively affect the ecosystem.
SolBlaze.org is a Solana validator who will be able to vote on this proposal.
Validator adds that goal is to lower inflation “sounds good in theory," but is a "terrible idea," citing that SIMD-0228 will “The cost of living has been reduced dramatically” the amount of Solana tokens staked. Given that view, they believe it will threaten decentralization and the security of the network while impacting Solana’s DeFi protocols, which rely on staking rewards.
“SolBlaze told us that “DeFi is the key to Solana’s adoption and it should be of concern for regular users if they are interested in seeing Solana succeed.” Decrypt SIMD-0228 is a topic that was brought up when participants were asked what they should do about it.
Lily Liu President of Solana Foundation has spoken against the plan.
“[SIMD-0228] It’s too, too half baked” posted Liu. She signaled support for fixed rates, which she called “Not dumb and arbitrarily,” citing that predictability is valuable in capital markets.
No to the proposed proposal,” she said, instead suggesting an extension so the proposal can be adjusted to incorporate other features.
Voting on SIMD-0228 is expected to start Friday evening during Solana Epoch 753, which is estimated to arrive around 8:30pm ET according to timetracking from Solscan. SolBlaze expects a “”Close vote” is the current slogan and the opposition uses the last few hours to ramp up their support.
The two-thirds majority is required to approve the bill.” they told Decrypt, “there's still a chance that enough people can come together to stop the proposal.”
Andrew Hayward edited the book
