The Solana Foundation has introduced a significant proposal, SIMD-0411, aimed at strengthening the network’s token economics. The plan, highlighted by Helius co-founder Mert Mumtaz, suggests doubling Solana’s annual disinflation rate from -15% to -30%.

Details of the SIMD-0411 Proposal

If the community approves this change, it would significantly shorten the timeline for Solana to reach its long-term inflation target of 1.5%. The proposal aims to achieve this goal in approximately three years, cutting the current six-year schedule in half without altering the fundamental structure of staking rewards.

The economic impact could be substantial. By slowing the rate at which new SOL tokens are created, the plan is projected to cut total supply growth by 3.2% over six years. This translates to a reduction of about 22 million SOL, valued at roughly $2.9 billion at current market prices.

For network participants, the primary trade-off would be a faster decline in staking yields. For instance, assuming 66% of SOL is staked, yields could drop from the current 6.41% to 2.42% by the third year. The proposal is designed to create a more predictable and stable economic model for the SOL token, though its passage is not guaranteed.

Market Performance and ETF Outlook

This proposal comes as Solana, like much of the broader cryptocurrency market, has faced downward price pressure. The SOL token is currently trading around $125.89, which reflects a decline of over 33% in the last 30 days.

Amid the market downturn, many investors are looking toward the potential approval of spot Solana Exchange-Traded Funds (ETFs) as a future catalyst. While several asset managers have launched Solana-based products in other regions, a spot ETF has not yet been approved in the United States. Progress on this front is widely seen as a key factor that could boost investor confidence and support a price recovery.