Solana Changes the Game: Will Staking Take Center Stage?

If SIMD-228 gets the green light, Solana’s monetary policy will change dramatically. The existing fixed inflation rate of 4.6%, gradually declining to 1.5%, will be replaced by a flexible issuance system tied to staking levels.

• Below 33% staking → Higher inflation to attract more validators
• Above 33% staking → Inflation drops to 1%, limiting SOL supply

This mechanism is built to stabilize staking participation and manage inflation, restricting token issuance when staking demand is high and boosting incentives when participation wanes.

Solana’s Community Reacts

The SIMD-228 proposal, designed to introduce dynamic inflation to SOL, is spearheaded by Multicoin Capital’s Tushar Jain and Vishal Kankani, alongside Anza’s lead economist Max Resnick.

The proposal has sparked intense discussions within the Solana community, with participants weighing its potential impact on staking rewards and token supply. The final decision is set for epoch #753, meaning a major shift in SOL’s economic model could be imminent.

As the vote on SIMD-228 approaches, Solana co-founder Anatoly Yakovenko and Helius CEO Mert Mumtaz have thrown their support behind the proposal, seeing dynamic inflation as a tool for network resilience and security.

Mumtaz added that regardless of the outcome, the debate itself proves Solana’s decentralized governance is working as intended.

Still, not everyone is in favor, and criticism from skeptics is gaining traction.

Solana Foundation President Lily Lu isn’t fully convinced by SIMD-228, warning that the proposal’s lack of clarity on staking yields could drive institutional investors away. She believes that the economic risks need to be studied more thoroughly and that the framework must be adaptable to market fluctuations.

In Europe, where staked ETPs are allowed, Solana ETPs are the #1 crypto product. Even bigger than Bitcoin, and certainly bigger than Ethereum. Asset managers say the reason is clear: to buyers, it's because of the growth story on the principal, paired with the predictable, attractive yield,

stated Lily Lu.

Despite these reservations, developers behind the proposal argue that extensive discussions over the past two months have helped refine it. They emphasize that SIMD-228 is not just an impulsive tweak but a well-researched adjustment based on in-depth economic analysis.

Balancing Incentives and Stability in Solana’s New Inflation Model

The push for dynamic inflation in Solana is attracting interest far beyond its own community. Many are likening it to Ethereum’s shift towards deflation, while financial experts argue that this model could drastically reduce network losses, potentially saving hundreds of millions each year.

Check this out: Solana vs. Ethereum in DeFi: Franklin Templeton Breaks Down the Competition

With 65% of SOL already staked, if SIMD-228 passes, inflation could drop below 1%, creating a more resilient and sustainable network. Should the proposal be approved, Solana would be among the first large-scale blockchain networks to implement such an inflation-adjustment mechanism.

The adoption of dynamic inflation represents a major milestone for Solana, signaling both technological progress and a test of decentralized governance.

As the vote nears, the crypto community is keenly observing whether this policy shift will strengthen the network or introduce new economic challenges. Whatever the outcome, Solana is at a crossroads.

Read on: Solana App Revenues Jump 213 Percent in Q4—Messari Reports Strong Growth