Solana Treasury Backs Proposal to Accelerate Disinflation Amid Recent Price Drop

• DeFi Development Corp endorses SIMD-0411 as the first Solana treasury, holding 2.2 million SOL worth $300 million, adding institutional support to the disinflation push.

• Solana’s recent 30% price drop from $197 to $136 has intensified calls for faster disinflation to stabilize token value.

• The proposal, introduced by Helius Labs, projects a $3 billion reduction in emissions over six years, aligning Solana’s policy with mature network metrics like DeFi throughput and user activity.

Discover how Solana’s SIMD-0411 proposal accelerates disinflation to cut emissions and boost SOL stability. Explore impacts on treasuries and price—stay informed on crypto policy shifts today.

What is the Solana SIMD-0411 Proposal?

The Solana SIMD-0411 proposal is a key initiative to reform the network’s inflation schedule by doubling the annual disinflation rate from 15% to 30%. Introduced by developers at Helius Labs, it seeks to shorten the timeline to the 1.5% terminal inflation rate from six years to three, reducing projected SOL emissions by approximately 22 million tokens over the next six years. This adjustment responds to Solana’s evolving ecosystem, including rising network revenue and DeFi activity.

Source: Mert Mumtaz

How Will SIMD-0411 Impact Solana’s Token Economics?

The SIMD-0411 proposal fundamentally alters Solana’s token issuance model to better reflect its growth as a high-performance blockchain. By accelerating disinflation, the network would emit fewer new SOL tokens annually, potentially easing the structural sell pressure that has weighed on prices. According to modeling from Helius Labs, this could save over $3 billion in equivalent value over six years, based on current token valuations.

Solana’s current schedule maintains a 15% disinflation rate, but proponents argue this no longer suits a mature network with robust user activity, decentralized finance throughput, and staking participation rates exceeding 70%. Data from Solana’s on-chain analytics highlights a surge in transaction volumes, underscoring the need for policy alignment. As one developer noted in the proposal draft, “Solana’s revenue streams and institutional adoption demand a disinflation curve that prioritizes long-term value preservation.”

Corporate holders, who manage significant SOL treasuries, stand to benefit from reduced dilution risks. However, implementation would require community consensus through Solana’s governance processes, ensuring broad stakeholder input.

Proposal seeks to speed up Solana disinflation. Source: GitHub

Frequently Asked Questions

What Does DeFi Development Corp’s Support Mean for SIMD-0411?

DeFi Development Corp, holding nearly 2.2 million SOL valued at around $300 million, became the first Solana Digital Asset Treasury to endorse the SIMD-0411 proposal. This backing lends significant institutional credibility, signaling confidence in faster disinflation to mitigate losses from SOL’s recent price volatility. As the third-largest corporate holder, their position influences broader treasury decisions.

Why Is Solana Accelerating Disinflation Now?

Solana’s push for accelerated disinflation through SIMD-0411 comes amid a 30% SOL price drop over the past month, from $197 to $136, per CoinGecko data. Corporate treasuries like Forward Industries face $646.6 million in unrealized losses, heightening urgency. The move aims to align token economics with network maturity, reducing emissions to foster stability and attract institutional capital.

Key Takeaways

• Accelerated Disinflation Timeline: SIMD-0411 shortens Solana’s path to 1.5% terminal inflation from six to three years, cutting 22 million SOL emissions.
• Institutional Endorsement: DeFi Development Corp’s support, as a major holder with $62 million in gains, bolsters the proposal’s momentum despite losses elsewhere.
• Price Stabilization Potential: By easing sell pressure, the change could help reverse SOL’s 30% decline, benefiting DeFi users and long-term investors.

Conclusion

The Solana SIMD-0411 proposal represents a pivotal step in refining the network’s disinflation schedule, addressing concerns over emission rates and their effect on SOL’s market performance. With endorsements from key players like DeFi Development Corp and data-driven rationale from Helius Labs, this initiative could enhance Solana’s appeal to institutional investors. As discussions progress, stakeholders should monitor governance votes to gauge the future trajectory of Solana’s token economics and overall ecosystem health.