A group of Solana enthusiasts is voicing their support for a new proposal (SIMD-0228) that promises a substantial decrease in inflation. <\/p>\n
Ryan Watkins, a partner at Syncracy Capital, anticipates that this move will lead to an 80% cut in inflation for Solana.\u00a0<\/p>\n
\n\u201cExpected reduction of 80% in inflation soon for SOL.\u201d<\/p>\n<\/blockquote>\n
Is Solana Overspending on Security?<\/strong><\/h2>\n
The proposed Solana Improvement Document (SIMD)-0228 seeks to link the Solana issuance rate to staking engagement.\u00a0<\/p>\n
Vishal Kankani of MultiCoin Capital has raised concerns about Solana potentially ‘overspending on network security’ due to its fixed issuance rate compared to Ethereum. in his words,\u00a0<\/p>\n
\n\u201cCurrently, Solana introduces around 4.5% new tokens annually, decreasing by 15% each year. In contrast, Ethereum, with less than 30% staked, releases less than 1%.\u201d\u00a0<\/p>\n<\/blockquote>\n
Kankani also noted that the current system hinders DeFi expansion.\u00a0<\/p>\n
\n\u201cThe high emissions from Solana not only drive prices down through increased selling pressure but also inflate staking rewards unnecessarily, which discourages participation in its expanding DeFi landscape.\u201d<\/p>\n<\/blockquote>\n
However, the proposed cut in staking rewards by almost 80% has faced opposition from certain community members.\u00a0<\/p>\n
Currently, stakers earn around 10% in rewards, a figure poised to decrease significantly under the new proposal.\u00a0<\/p>\n
Could SOL Plummet to $120?<\/strong><\/h2>\n
Interestingly, the voting period follows closely on the heels of the unlocking of 11.2 million SOL from the FTX estate in March.\u00a0<\/p>\n
This large unlock on the 1st of March has exerted bearish pressure on the token, especially in the wake of the LIBRA memecoin controversy.\u00a0<\/p>\n
SOL has experienced a 53% drop from its all-time high of $295, falling below $140. <\/p>\n
Nevertheless, Greg Magadini from Amberdata believes that the unlocking event was already factored into the market, and a broader market recovery could boost SOL’s value.\u00a0<\/p>\n
In a recent newsletter, Magadini remarked,\u00a0<\/p>\n
\n\u201cIt’s possible that a relief rally in SOL prices might result in a positive correlation between spot prices and volatility, especially since the market may be overly bearish.\u201d\u00a0<\/p>\n<\/blockquote>\n
The prolonged decline of BTC to $86K has dampened market sentiment. Deribit reported that put options (bearish wagers) targeting $120 were the most popular in the past 24 hours.\u00a0<\/p>\n
These trends imply that SOL traders are bracing for further downside risks, possibly towards the $120 mark in the initial week of March.<\/p>\n
\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
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