DeFi Development Corp (DFDV) has become the first treasury in Solana’s ecosystem to endorse SIMD-0411, an ambitious proposal aimed at accelerating disinflation efforts as corporate holders experience significant losses.

On Tuesday, DFDV made a public commitment to support the initiative which seeks to increase the annual disinflation rate from 15% to 30%. This measure is projected to decrease future emissions by over 22 million SOL tokens over the next six years.

“This proposal may come as a surprise to some, but its timing makes sense,” DFDV stated. “The ecosystem has grown increasingly vocal about Solana’s current inflation schedule and its impact on SOL’s price.”

DFDV currently holds around 2.2 million SOL tokens, worth about $300 million, making it the third-largest corporate holder in the network.

While DFDV’s endorsement adds significant leverage to the ongoing discussion about inflation, other treasury holders like Forward Industries and Solana Company have not taken a public stance on this proposal.

Proposal seeks to accelerate disinflation Source: Mert Mumtaz

Proposal Aims to Expedite Solana Disinflation

Helius Labs submitted SIMD-0411 on Saturday, described as one of the most vital monetary policy revisions for Solana since its inception. This draft aims to halve the time to achieve a 1.5% terminal inflation rate from six years to three by increasing the annual disinflation rate.

Based on the model presented in the proposal, such changes would save around 22 million SOL over the next six years, translating to roughly $3 billion.

Proponents highlighted that the current inflation curve does not align with the network’s evolving maturity, pointing to parameters such as network revenue, user engagement, and decentralized finance (DeFi) activity.

By reducing token issuance, supporters argue that the network could better manage selling pressures and meet the expectations of institutional investors looking for stability.

Solana Price Decline Increases Pressure on Treasuries

Recent data shows that SOL’s price has plummeted from $197 on October 26 to $136, marking a 30% drop recently. This decline has intensified the dialogue surrounding inflation, with certain corporate investors facing substantial losses.

For instance, Forward Industries, the primary SOL holder, has reported an unrealized loss exceeding $646.6 million, which equates to a 41% decrease from its purchase price. Additionally, Upexi, another major corporate holder, faces approximately $31 million in unrealized losses, translating to a 10% decline from its purchase prices.

Despite these losses, DFDV, which has backed the proposal, is still in the green, with data indicating a profit of around $62 million, representing a 26.6% unrealized gain from its SOL acquisitions.