A Proposal for a Major Update to Solana (SOL) Has Been Submitted – Here’s What’s Coming

The Solana (SOL) ecosystem has opened discussion on a significant governance proposal that could reshape the network’s inflationary structure.

The proposal, codenamed SIMD-0411, aims to double the current annual inflation rate by increasing it from -15% to -30%. If implemented, Solana’s inflation rate would rise from 4.18% today to reach the long-term target of 1.5% in early 2029 rather than 2032. This would reduce the time it takes to reach the final inflation rate from 6.2 years to 3.1 years.

According to modeling, the proposal would prevent approximately 22.3 million SOL from being issued over the next six years. This amount is equivalent to approximately $2.9 billion at current prices. Long-term investor retention is expected to increase due to the decline in total supply, reduced pressure on staking returns, and a weakening trend toward token sales.

Increasing the rate of inflation decline will also gradually reduce staking returns. Under the proposal, nominal staking returns will decrease from 6.41% to 5.04% in the first year, 3.48% in the second year, and 2.42% in the third. The impact on the validator economy is expected to be limited: only 10 of the 845 validators are expected to lose profitability in the first year, rising to 27 in the second year and 47 in the third year.

Proponents of the proposal cite the approach’s greatest advantages as “simplicity and predictability.” They argue that because only a single protocol parameter needs to be changed, the risk is low, core developer resources won’t be consumed, and the change is easily understandable by both individual investors and institutions. They also point out that, unlike dynamic inflation models, future supply can be clearly calculated.

The Solana community is currently discussing SIMD-0411 within the governance framework. If approved, the proposal is expected to be deployed in approximately six months, depending on network updates and the governance process.

*This is not investment advice.

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