It’s been three weeks since Solana’s validators rejected SIMD-0228, a governance proposal designed to transition Solana’s issuance to a market-oriented model while aiming to decrease inflation. Despite this setback, the issue of issuance remains unresolved, as validators, who benefit from Solana’s inflation, voted against the measure. The recent implementation of SIMD-0096, which eliminated the priority fee “burn,” has contributed to concerns that the network may be “overpaying” for economic security through inflationary practices.
### Proposing Alternatives for Inflation Management
In light of the current situation, Austin Federa, the former head of strategy at the Solana Foundation, has put forth a counterproposal dubbed “left curve 228.” This proposal advocates for an accelerated disinflation curve for Solana, encouraging the network to experiment with this approach and observe the results. Currently, Solana’s inflation rate is approximately 4.6%, which is expected to decrease to 1.5% in 15% increments every 180 epochs, or about one year. Federa’s plan suggests increasing the disinflation rate to 30% every 180 epochs, which would potentially reduce Solana’s inflation rate to around 1.5% in roughly three years.
Federa argues that this adjustment would prevent Solana from excessively compensating for security, while also avoiding the uncertainty regarding inflation rates that some critics associated with SIMD-0228. However, the proposal has faced criticism, particularly from Kevin Ricoy, the founder of a crypto media startup named Allmight. Ricoy expressed concerns about individuals attempting to micromanage monetary policy, asserting that Bitcoin’s value is derived from its stable inflation model. He later provided a more nuanced response to the proposal.
### Insights from Austin Federa
When asked for his thoughts on “left curve 228,” Federa remarked that the earlier SIMD-0228 proposal felt overly complex during a time when there is a demand for straightforward solutions. He noted that amidst global changes influenced by artificial intelligence and shifting governments, the proposal appeared convoluted. “Left curve 228 aimed to balance the need for progress without letting perfection hinder practicality,” he stated. While he acknowledged that the proposal might not be perfect, he believes it is a step in the right direction. He pointed out that Solana currently burns 50% of its base fees, which, while not ideal, is close to an optimal solution and easily comprehensible for users.
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