Multicoin Capital, an early investor in Solana, has proposed a change to the network's inflation mechanism. The proposal suggests moving from a fixed schedule to a market-based solution for issuing SOL tokens. This would likely lower inflation but also decrease staking yields. The proposal aims to set a target staking rate of 50% for security and decentralization. If more or less than 50% of SOL is staked, the issuance would adjust accordingly. Multicoin believes a reduction in SOL inflation is necessary to prevent centralization and increase the usefulness of SOL for DeFi. However, there are concerns and precedents from other blockchains, such as Cosmos, where the market-based inflation mechanism faced disputes. The proposal is inspired by perpetual swaps and their use of funding rates, rather than Ethereum's mechanism. One consequence of the proposal would be a decrease in staking yields, which have historically been high for SOL holders.



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