## SIMD-0411 Faces the Intersection: Should Solana "Tighten" Inflation?

The Solana community is debating an important decision — whether to accelerate the reduction of inflation. The proposal **SIMD-0411** (, meaning "curbing double inflation"), was put forward by Losin and Ichigo from Helius Dev and is currently in discussion before a vote. This isn’t the first time the community has discussed this issue, but what’s different this time?

### What is the new proposal?

SIMD-0411 suggests **doubling the speed of SOL’s inflation reduction**, from -15% to -30% annually. As a result, the time for the SOL token to reach its 1.5% inflation target will be sooner — from early 2032 to early 2029.

Specific calculations show that, **over the next 6 years, SOL issuance will decrease by 22.3 million tokens** (from 721.5 million down to 699.2 million), equivalent to about $3.12 billion at the current SOL price of $139.63. This is a significant figure, enough to alter the economic structure of the entire network.

### How does this differ from SIMD-0228?

SIMD-0411 is not the first idea to overhaul the inflation model. Earlier this year, Multicoin Capital — an early investor in Solana — proposed **SIMD-0228**, a much more complex design.

SIMD-0228 aimed to create a **dynamic inflation model**, adjusting staking rewards based on the percentage of tokens staked (targeting 50%). If more than 50% of SOL is locked in staking, the system would reduce inflation to prevent further increases; if below 50%, inflation would rise to encourage more staking. However, **SIMD-0228 was too complicated and failed** due to community opposition, mainly because of conflicts of interest between large and small validators.

In contrast, SIMD-0411 is a **simpler and safer version**. It only adjusts a single parameter instead of redesigning the entire system, maintaining the community consensus on a 1.5% inflation target. With a 6-month activation period, stakeholders have reasonable time to prepare.

### Who supports, who opposes?

**Supporters** (including DeFi Dev Corp) argue:

- Solana has moved past the phase of "needing high inflation for growth." Data from 2023-2025 shows protocol revenue increasing from $29 million to $1.42 billion (2024) and $1.38 billion (2025) — nearly 50 times growth. DEX volume increased from $12 billion (2022) to $694 billion (2024) and is projected to reach $1.45 trillion (2025). Solana has processed 68.6 billion transactions from 2023-2025, compared to Ethereum’s 1.27 billion — a 50-fold difference.

- High inflation is currently dragging down SOL’s price performance, requiring urgent resolution.

- Institutional investors prefer assets with **predictable inflation**, making them more attractive for DAT and ETF investments.

- Lower staking yields will encourage SOL to flow into DeFi (for lending, liquidity pools, stablecoins).

**Opponents** worry:

- Collateral yields will decline: from 5.04% in the first year to 3.48% in the second, then 2.42% in the third. According to analysis by 0xSpade, 10 validators will no longer earn interest in the first year, 27 in the second, and 47 in the third.

- Some validators may have to shut down due to lack of profitability, reducing short-term economic security.

- Sudden changes could cause market volatility.

- ETF yields, collateral products, and DAT will decrease accordingly.

### Is SOL worth a leap?

Although SOL’s price hasn’t been impressive this year ($139.63 currently), positive signs are emerging. **Treasury SOL is continuously being bought** despite not being as "notable" as BTC and ETH. **Spot SOL ETFs** have recorded net inflows of $128 million in just one week (mid-November), with total AUM now at $719 million and BTC dominance at 1.01%.

According to the SOL Strategic Reserve Fund data, treasuries and ETFs hold a total of **25.581 million tokens of SOL** (worth ~$3.55 billion). This indicates that institutional investors **are forming a solid support layer** for Solana, unlike other crypto assets experiencing sell-offs.

From a long-term perspective, a **"transparent and predictable inflation mechanism"** will attract more retail and institutional investors. Although decreasing staking yields will exert short-term selling pressure, it also provides the community an opportunity to build a more robust economic foundation for Solana.

Will SIMD-0411 pass the vote without failing like SIMD-0228? The community will soon have the answer.