Solana's 'Double Deflation' plan proposes to double the deflation rate from 15% to 30% over three years, aiming to reduce the annual inflation rate from 4.5% to 1.5%. This initiative, known as SIMD-0411, seeks to remove approximately 22.3 million SOL from the inflation schedule over six years, potentially cutting $2.9 billion in sell pressure.
Analysts suggest the plan could impact short-term DeFi returns but may alleviate long-term sell pressure from staking rewards. Helius Labs founder Mert Mumtaz highlighted that the proposal could reduce sell pressure from stakers liquidating rewards for taxes. However, the community remains divided, with some members concerned about the effect on DeFi yields. A previous proposal to cut inflation by 80% was rejected due to similar concerns. The community is set to vote on the adoption of SIMD-0411.
Solana's 'Double Deflation' Plan Could Alter DeFi Returns
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