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Cryptocurrency investment firm Multicoin Capital has released a governance proposal aimed at modifying the current emission model of the Solana 
$173 network. The initiative seeks to reduce inflation for Solana’s native token, SOL, thereby enhancing its overall economic sustainability.
Details of the Proposal
Named SIMD-0228, the proposal aims to make SOL emissions market-oriented. In this new model, the emission rate will be adjusted dynamically, allowing for greater flexibility based on real-time market conditions.
Target for Staking Participation
The proposal suggests that if the total amount of staked SOL exceeds a specified target rate, the release rate of SOL will be reduced. A target staking participation rate of 50% is recommended to achieve this goal.
Current Emission Mechanism
Currently, Solana operates on a fixed emission mechanism that does not adjust the amount of SOL distributed as staking rewards based on market conditions.
“The existing Solana emission program is not optimal considering the network’s activity level and fees, as it produces excessive SOL to secure the network,” stated Tushar Jain.
The proposal is available in an open-source software repository on GitHub, where the authors argue that a dynamic emission rate would better reflect the network’s real-time economic and security conditions.
In the past 24 hours, SOL’s price has increased by 3%, and nearly 13% over the past week, currently trading at around $210. According to CoinGecko, SOL’s market capitalization stands at $102 billion during this period.
If the proposal is implemented effectively, the authors believe it will systematically reduce selling pressure as long as staking participation remains adequate.
In conclusion, Multicoin Capital’s proposal aims to improve the economic and security dynamics of the Solana network. By making the emission rate dynamic, it could stabilize SOL’s value and enhance the network’s security.
