The Solana community is debating Solana Improvement Document (SIMD)-0228, a governance proposal that could change the network's tokenomics structure by introducing a dynamic, market-based SOL issuance model.
SIMD-0228 is co-authored by Tushar Jain and Vishal Kankani from Multicoin Capital, with support from Max Resnick, chief economist at Anza—an important organization in Solana’s development ecosystem. The community is expected to vote on this proposal in epoch 743, which falls at the end of this week.
Major Changes in SOL Issuance Policy
SIMD-0228 proposes adjusting SOL issuance (inflation rate) based on the percentage of staked SOL relative to the total supply. This could replace Solana’s current fixed inflation schedule, which is set at 4.6% per year, decreasing by 15% annually until stabilizing at 1.5%.
Under the new mechanism, if the staking rate drops below 33%, SOL issuance will increase to incentivize staking. Conversely, if the staking rate is high, staking rewards will decrease, helping to control inflation and prevent excessive security costs. However, this could impact the earnings of stakers and validators, particularly smaller entities.
Impact on SOL Value and Long-Term Strategy
Supporters argue that Solana’s growing economic activity requires a more flexible monetary policy. The new model could make SOL scarcer when staking rates are high, potentially increasing token value and benefiting long-term holders. If implemented, it could significantly reduce inflation and prevent losses of hundreds of millions of dollars annually.
Projections suggest that under current conditions with a 65% staking rate, the new inflation rate could drop below 1% per year. If the staking rate falls to 33%, inflation would automatically adjust upward to attract more staking participation.