Solana Digital Asset Treasury (DAT) DeFi Development Corp. (DFDV) expressed support for a comprehensive proposal geared toward accelerating the network's inflation plan.
On Tuesday, DFDV became the primary Solana treasury to publicly endorse Solana Improvement Document (SIMD)-0411, a proposal to double Solana's annual inflation rate from 15% to 30%, thereby reducing projected future emissions by over 22 million SOL over the subsequent six years.
“This proposal could also be surprising to some, but its timing is sensible,” DFDV wrote. “The ecosystem is becoming increasingly vocal about Solana’s current inflation plan and its impact on the value of SOL.”
Data from the Solana Strategic Reserve shows that DFDV holds nearly 2.2 million Solana (SOL), price about $300 million, on the time of writing. This makes the corporate the third largest owner of SOL tokens.
While DFDV's support gives institutional weight to the high-risk discussion, other DATs comparable to Forward Industries or Solana Company haven’t commented on the difficulty.
Source: Mert Mumtaz
The proposal goals to speed up the disinflation of Solana
Developers at Helius Labs unveiled SIMD-0411 on Saturday, marking one of the significant monetary policy proposals for Solana since its launch.
The draft recommends doubling Solana's annual inflation rate from 15% to 30%, which might allow the network to succeed in its long-term final inflation rate of 1.5% in only three years as a substitute of six.
According to modeling included within the proposal, the change would cut back projected issuances by roughly 22 million SOL tokens, such as roughly $3 billion, over six years.
The developers said that the present inflation curve not reflects the maturity of the network, but moderately indicates network revenue, user activity and decentralized finance (DeFi) throughput.
Proponents said that by reducing issuance, the network could reduce structural selling pressure and align it more closely with institutional investors' expectations of a contemporary crypto asset.
The Solana price drop puts DATs under pressure
Data from CoinGecko shows that SOL has fallen from $197 on October 26 to $136 on the time of writing, a 30% decline over the past month. The sharp downturn intensified the inflation debate as a few of the largest business owners suffered heavy losses.
According to CoinGecko, Forward Industries, the most important corporate SOL holder, faces an unrealized loss of roughly $646.6 million, a decline of 41% from the full purchase price.
Upexi, the fifth-largest company holder, can also be within the red and has unrealized losses of about $31 million, down 10% from its entry prices.
DFDV, which publicly supported the proposal, remains to be profitable. Data from CoinGecko showed the corporate saw an increment of about $62 million, reflecting a 26.6% unrealized gain on its previous SOL purchases.
