- The proposal of Solana, which aims to reduce the inflation of SOL by a maximum of 80%, has reached Quorum with 71.85% votes.
- Will the Sol make it more deflation in the course of time?
Solana [SOL] is deep in its most bearish cycle and slides on the press of $ 270 of all time to $ 213.
To prevent this, developers promote the SIMD-228 proposal, which wants to reduce the inflation of SOL by a maximum of 80%. With 71.85% of the votes before, the proposal has already reached Quorum.
A successful implementation can tighten the supply dynamics of Sol. But will this be enough to reverse the sentiment of the market?
Solana’s deflatory model in the focus
The tokenomics from Solana follows a semi-deflationary model, in which part of the transaction costs is permanently burned, which reduces the total supply.
This mechanism helps compensate for inflation and supports long -term stability.
The transaction costs of Solana, however, have fallen to a lowest point in six months, according to an ambcrypto report, which indicates a significant decrease in demand on the chains.
Source: Artemis Terminal
Since Solana’s deflotional pressure is directly connected to network activity, lower transaction volumes means less sol – burned – weakening its ability to compensate for inflation.
To tackle this, the SIMD-228 proposal aims to reduce the inflation of Sol by reducing rewards. It is the primary way in which new SOL -Tokens introduces the circulation.
New SOL is currently being issued at an annual rate of 6.8%, mainly by Drawing up rewards For validators.
SIMD-228 proposes to lower this percentage by a maximum of 80%. In response, it would considerably limit the number of new tokens that enter the blood circulation.
Price impact and market sentiment
At the time of the press, the circulating range of Solana is 509.38 million Sol, with its price trade at $ 124.78.
This translates into a market capitalization of $ 63.56 billion, which marks a sharp decrease in his $ 123 billion of all time high (ATH) during the rally from the middle of January.
Source: Coinmarketcap
The falling appreciation of Solana is largely due to reduced activity on the chains and a risk-off investor’s mindset.
The SOL/BTC purple has fallen to a lowest point of two years, indicating that traders Sol still consider a high risk, a high volatility active.
Source: Coinalyze (SOL/BTC)
With transaction costs at a lowest point of six months, fewer Sol tokens are burned, which weakens the deflatory model and add pressure to the price.
If SIMD-228 successfully reduces inflation and at the same time keeps stimulators, this can increase trust, improve supply dynamics and determine the stage for Sol’s next rally.
However, adoption and network use remain crucial in determining its actual impact.
