Solana's Proposed Change: A Review of SIMD-0228
2025-03-08
The Solana blockchain is on the cusp of a significant change, with the proposed implementation of SIMD-0228, a new emission schedule that could alter the frequency at which new tokens are generated. This proposal has sparked intense debate among Solana builders and personalities, with some arguing that it will benefit the network and others claiming that it will have negative consequences. In this review, we will delve into the details of SIMD-0228, its potential impact on the Solana ecosystem, and the arguments for and against its implementation.
What is SIMD-0228?
SIMD-0228 is a proposal to change the Solana emission schedule from a fixed-rate to a programmatic, market-based schedule that adapts to network activity. The current mechanism is based on a fixed, time-based schedule, which decreases Solana inflation over time. In contrast, SIMD-0228 proposes a "smart emissions" system that takes into account staking participation rates and network activity to determine the emission rate. This change is intended to reduce inflation, spur DeFi usage, reduce sell pressure, and improve the narrative around Solana's existing inflation.
Arguments For SIMD-0228
Proponents of SIMD-0228, including Solana Labs co-founder Anatoly Yakovenko, argue that the current emission schedule is "dumb" and does not take into account network activity. They believe that the proposed change will benefit the network and stakers by reducing inflation, which is currently estimated to cost the network around $1-2 billion per year. Anza Lead Economist Max Resnick contends that Solana is overpaying for network security, with SOL holders suffering at the expense of SOL stakers through high inflation.
Arguments Against SIMD-0228
On the other hand, some Solana builders and personalities argue that SIMD-0228 will have negative consequences, such as pricing out smaller validators and discouraging marginal buyers and institutions from taking positions in Solana. They claim that the proposed change will reduce the attractiveness of Solana to new investors and stakers, ultimately harming the network's growth and adoption.
Changes to the Proposal
In response to initial feedback, the proposal's authors have made slight changes to the implementation rollout, extending the curve's rollout to 50 epochs, rather than 10. This change is intended to allow sufficient time to assess the impact of the proposed new emission mechanism after deployment. The implementation of SIMD-0228 is now unlikely to begin within 6 months, and the newly proposed SOL emission schedule will not be fully operational until around one year from approval.
Conclusion
The proposed implementation of SIMD-0228 has sparked intense debate within the Solana community, with valid arguments on both sides. While some believe that the change will benefit the network and reduce inflation, others are concerned about the potential negative consequences. As the Solana ecosystem continues to evolve, it is essential to carefully consider the potential impact of SIMD-0228 and weigh the pros and cons before making a decision. Ultimately, the outcome of the vote will determine the future of Solana's emission schedule and the direction of the network.