Solana's Treasury Endorses Aggressive Disinflation Plan Amid Price Drop
The Solana Digital Asset Treasury's DeFi Development Corp supports a new proposal aiming to double the disinflation rate in the wake of significant price declines.
DeFi Development Corp (DFDV), the first treasury on the Solana network, has endorsed proposal SIMD-0411, designed to accelerate the schedule for disinflation, especially as corporate holders are experiencing notable financial losses.
On a Tuesday, DFDV publicly supported SIMD-0411, aiming to double Solana’s annual disinflation rate from 15% to 30%, potentially slashing future emissions by over 22 million SOL across the upcoming six years.
“This proposal may come as a surprise to some, but its timing makes sense,” DFDV noted. “The ecosystem has become increasingly vocal about Solana’s current inflation schedule and its influence on SOL’s price.”
“Esta propuesta puede sorprender a algunos, pero su momento tiene sentido. El ecosistema se ha vuelto cada vez más vocal sobre el actual calendario de inflación de Solana y su impacto en el precio de SOL.”
Data from the Solana Strategic Reserve indicates that DFDV holds close to 2.2 million SOL tokens, valued at roughly $300 million, making them the third-largest corporate SOL holder.
While DFDV’s backing fortifies the ongoing discussions regarding inflation, other treasuries like Forward Industries and Solana Company have yet to comment on the issue.
Proposal to Fast-Track Solana’s Disinflation
The SIMD-0411 proposal, introduced by Helius Labs, marks a significant step in monetary policy for Solana since its inception. It aims to fast-track the network’s disinflation trajectory, aligning it more closely with institutional expectations from a modern crypto asset.
Currently, projections indicate that implementing the amendment would reduce emissions by around 22 million SOL, approximately valued at $3 billion, over the next six years. The proposal suggests that the existing inflation rates fail to reflect the maturity of the network.
SOL’s Price Drop Increasing Pressure on Treasuries
Recent data from CoinGecko reveals that SOL’s price visited a steep decline from $197 on October 26 to $136 at present, a significant 30% drop within a month, intensifying the inflation conversation among leading corporates.
DFDV, which supports the new proposal, remains profitable with an unrealized gain of about $62 million from its previous SOL purchases, while Forward Industries struggles with a net loss of around $646.6 million due to this downturn.
