Solana’s Validators Reject Inflation Reduction Proposal SIMD-0228
Solana's validators recently rejected governance proposal SIMD-0228, which aimed to transition to a market-based issuance model and reduce inflation. This decision leaves the network's inflation strategy uncertain.
The implementation of SIMD-0096 removed the priority fee “burn,” leading to concerns that Solana is overpaying for its economic security through inflation. Austin Federa, former head of strategy at the Solana Foundation, proposed "left curve 228" to accelerate the disinflation curve.
- Current inflation rate is around 4.6%, planned to decrease to 1.5% every 180 epochs (approximately one year).
- Federa's proposal suggests increasing the disinflation rate to 30% every 180 epochs, potentially achieving a 1.5% inflation rate in three years.
- This approach aims to prevent excessive security costs while maintaining stable inflation rates.
Federa acknowledged criticism of his proposal, emphasizing the need for simplicity in monetary policy amid changing global conditions. He described "left curve 228" as an attempt to balance optimality and understandability.