Solana News Today: Solana's Inflation Reform Could Threaten Validator Decentralization

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Solana News Today: Solana's Inflation Reform Could Threaten Validator Decentralization

Bitget-RWA2025/11/25 18:44

By:Bitget-RWA

- Solana's governance community proposes SIMD-0411 to accelerate inflation reduction to 1.5% by 2029, halving the timeline from six to three years. - Institutional backer DFDV supports the plan, arguing current inflation rates misalign with growing user activity and DeFi throughput. - Faster disinflation could reduce token supply growth by $2.9B over six years but risks validator centralization as staking rewards drop from 6.41% to 2.42%. - Market analysts link the proposal to Solana's $136 price recovery

Solana's governance participants are moving forward with an ambitious proposal to speed up the network’s transition to a 1.5% terminal inflation rate, a shift that could significantly alter the cryptocurrency’s economic structure and influence investor outlook. The plan, known as SIMD-0411, aims to increase the annual disinflation rate from -15% to -30%,

effectively halving the time

needed to achieve the target—from six years down to three. Should it pass, this adjustment would lower anticipated future emissions by about 22.3 million SOL—worth $2.9 billion at current market value—over a six-year period

based on current assessments

This proposal, put forward by developers at Helius, has already attracted support from institutional players. The

Solana

Digital Asset Treasury (DAT)

DeFi Development Corp.

(DFDV), a significant corporate SOL holder, was the first treasury to publicly back the initiative

according to sources

. DFDV, which manages close to 2.2 million SOL (valued at $300 million currently),

stated that the existing inflation model

is now out of step with Solana’s expanding user base, revenue, and DeFi activity. The straightforwardness of the proposal—

changing just a single parameter

in Solana’s economic system—has been cited as a major benefit.

With this new approach, inflation would drop from its current 4.18% to 1.56% by 2029,

rather than the previously planned 2032

. This accelerated reduction would also

ease ongoing sell pressure

from token issuance, a factor that analysts believe could make Solana more appealing to institutional investors. Nevertheless, the proposal may face resistance from validators, as their staking rewards would decrease more quickly. Present yields of about 6.41% would drop to 2.42% within three years

according to projections

. While larger validators with multiple income sources might adjust, smaller operators could find it difficult to stay profitable,

potentially increasing centralization risks

Market conditions are adding pressure to the discussion.

Solana’s value has dropped by 30%

over the last month, with the price at $136 as of November 22. The introduction of Solana spot ETFs,

such as the 21Shares TSOL fund

on CBOE, is seen as a possible driver for a rebound.

Experts suggest

that slowing the rate of new supply could strengthen the narrative of scarcity for SOL, helping stabilize prices during periods of broader crypto market turbulence.

The outcome of the proposal depends on agreement among validators and the wider community. While DFDV’s support lends institutional weight, other large treasuries like Forward Industries have not yet made their positions public

according to sources

. The proposal’s minimalistic design—

steering clear of complicated changes

or abrupt reductions—has been recognized as a practical approach. Still, there are ongoing worries about validator earnings and the network’s decentralization. As Solana faces this critical juncture, the decision could serve as a model for how blockchain projects balance long-term economic health with the interests of their stakeholders.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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