TL;DR
- Solana proposes a variable SOL emission model based on staking participation to optimize network security and stability.
- The new system aims to reduce inflation and selling pressure by adjusting token issuance according to validator activity.
- The Solana community is evaluating and voting on proposal SIMD-0228, which requires at least 66% approval and a 33% quorum.
Solana has proposed a new mechanism to adjust the issuance of its SOL token based on staking participation. The proposal seeks to replace the current fixed emission system with a programmatic model that adapts to network activity. The central idea is to reduce token issuance without compromising blockchain security.
Solana’s current system follows a predetermined schedule that does not account for ecosystem evolution. As validators have found new revenue sources, such as MEV (Maximal Extractable Value), the need to incentivize security through token emissions has decreased. In the last quarter of 2024, MEV revenue on Solana exceeded $400 million, showing significant growth compared to previous periods.
How Will Solana’s New Emission Model Work?
The new model will adjust SOL issuance based on the percentage of tokens staked. When participation is high, issuance will be reduced to the minimum necessary. If participation decreases, the system will increase issuance to encourage more users to stake their tokens and maintain network security. To prevent abrupt changes, the transition to the new mechanism will take place over 50 epochs, gradually adjusting the emission rate until the new formula is reached.
The proposed system also aims to reduce selling pressure caused by token inflation. In proof-of-stake networks, stakers often sell a portion of their rewards to cover taxes or other costs, which can affect the asset’s price. By limiting SOL issuance to what is strictly necessary, this effect is expected to decrease, strengthening market stability.
Everything Is in the Hands of the Community
Proposal SIMD-0228 is currently in the discussion and voting phase within the Solana community. Validators can analyze the new formula, suggest improvements, and cast their votes based on their stake weight. The process includes verifying staking participation data and a voting period where validators will send tokens to specific addresses to express their decision. For approval, at least two-thirds of the votes must be in favor, and voter participation must reach 33%
