Solana Insiders Wanted to Reduce Inflation, but It Failed. Here’s What the Proposal’s Author Thinks - Ep. 800
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Be honest, I was disappointed. I do continue to think this was the right path for the network, and, I was disappointed to see it fail. But, I was quickly reminded by looking at all the stats of just how big of a success it was for the network governance.
Hi, everyone. Welcome to Unchained, your no hype resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today, we have one from I need the tech on x, responding to our episode with Chris Giancarlo and Mike Belshi about the White House Crypto Summit. I need the tech writes, quote, after hearing all the people at the summit say the same thing while looking at their faces, right now, the sentiment is gimmicky, which I believe will change over time due to other countries who are currently more bullish on crypto, forcing America to compete
having me. Heads
up, everyone. Although our guest this week is a managing partner of a registered investment adviser, nothing in this podcast should be considered an offer of MultiCoin's investment advisory services or should otherwise be confused for investment, tax, legal, or other financial advice. So Tisha, are you, Vishal Khankani, also of Multicoin, and Max Resnick of ANSA proposed SIMD two two eight or Solana Improvement Document two two eight, which introduced a programmatic market based emission mechanism based on the staking participation rate. We almost recorded this podcast on Thursday before the f
Yeah. Absolutely. So to set some context, we've been thinking about Solana emissions and the nature of staking for a long time now, and the work on this inflation reduction SIMD began in earnest after some conversations we had at breakpoint last year. So about five, six months ago, there was a clear sense that inflation was too high amongst several diverse set of network participants. And there was also a sense that inflation was not something that was seriously considered, in the early days of Solana when it was set. It was just copy pasted from Cosmos. And, Tully and the rest of the core dev
So, as far as I understand, at least currently, especially because this didn't pass the emissions or sorry. The the inflation model initially started at 8%, and it's been decreasing 15% annually. However, at a certain point, when it reaches 1.5, I guess, it's supposed to remain stable there. So explain now what changes you proposed in SIMD 02/28.
So the idea behind SIMD 02/28 was that inflation should be a function of staking participation. And our fundamental rationale for that is, you know, what is the point of inflation? Why do these systems have inflation in the first place? And the reason they have inflation is to incentivize stakers when there isn't, anything else to incentivize stakers. And we need stakers because in a proof of stake system, the stakers are what provide the economic security for the whole network. If you don't have any stakers, then you don't have a proof of stake network. So when we thought about it from that f
You know, it it seemed to me somewhat similar to EIP one five five nine in that it, is trying to tie the economic model of the network to the participation. And, and because of the fact that staking, you know, is tied to security, that also, you know, it it prevents you from overpaying for security or underpaying. So for for listeners who have that as a reference, that, is how I was viewing it. And I saw that, you know, beforehand, there was a pretty strong debate. It seemed like there were more people in favor, but, like, I listened to, a Twitter Spaces. I think Mert was the
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