Multicoin has released a Solana Improvement Proposal suggesting an adjustment of SOL's issuance schedule to a market-based solution.

BlockBeats News, January 17th, Multicoin Capital, one of Solana's early investment firms, is now attempting to change Solana's network inflation mechanism.

Multicoin Capital's two partners, Tushar Jain and Vishal Kankani, have submitted a proposal regarding Solana's "Smart Issuance," proposing to adjust SOL's issuance from the current fixed schedule to a market-based solution. Multicoin's proposal could lower SOL's inflation.

In Solana terms, inflation refers to the network issuing SOL to validators running Solana software and helping to build the blockchain. Validators then pass on these issued SOL as well as some MEV (Miner Extractable Value) rewards to the stakers delegating SOL to them.

In brief, Multicoin's proposal sets a 50% target staking rate to ensure network security and decentralization. If staked SOL exceeds 50%, the issuance will decrease to reduce rewards and suppress staking. If staked SOL is less than 50%, the issuance will increase, boosting rewards and encouraging staking. The minimum inflation rate is 0%, and the maximum is based on Solana's current issuance curve.

Solana's inflation rate was initially set at 8% and decreases by 15% annually until reaching a 1.5% inflation rate. According to Solana Compass, SOL's current inflation rate is approximately 4.8%. Solana co-founder Anatoly Yakovenko stated in a podcast that the concept of a fixed rate is borrowed from the Cosmos blockchain, and inflation is just an "accounting treatment." (Blockworks)