Solana's Dual Proposals Aim to Slash $677M-$1.1B in Annual Sell Pressure

VanEck's Director of Digital Asset Research, Matthew Sigel, has recently shared insights on the potential impact of two significant proposals on the Solana (SOL) ecosystem. The combined effect of SIMD 096 and SIMD 0228 is estimated to reduce SOL's annual sell pressure by a substantial amount, ranging from $677 million to $1.1 billion.

SIMD 096, introduced earlier, aims to eliminate the 50% preferential fee burning mechanism, which could increase tax-related selling pressure. However, SIMD 0228, a recently opened proposal, is expected to fully offset this impact. The proposal, which is set to be voted on in approximately 10 days, seeks to transition SOL issuance to a market-driven model.

SIMD 0228 targets a 50% staking ratio to enhance network security and decentralization. If over 50% of SOL is staked, the issuance will decrease, suppressing further staking and lowering the yield. Conversely, if less than 50% of SOL is staked, the issuance will increase to raise the yield and incentivize staking. The minimum inflation rate is set at 0%, with the maximum inflation rate determined based on Solana's current issuance curve.

The combined effect of these proposals is expected to significantly reduce SOL's annual inflation pressure, contributing to a more stable and secure ecosystem. As the votes on SIMD 0228 approach, the Solana community eagerly awaits the outcome and its potential impact on the network's future.