Lightspeed Why Solana Needs To Fix Its Inflation Rate | Tushar Jain
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Jan 17, 2025 Tushar Jain, co-founder and managing partner of Multicoin Capital, dives into the pressing issue of Solana's inflation. He discusses his proposal to shift to a market-based inflation model, contrasting it with historical strategies from other cryptocurrencies. Jain highlights the impact of inflation on network security and the importance of staking. The conversation also touches on the SIMD 96 proposal aimed at restructuring transaction fees and the intricacies of Maximal Extractable Value (MEV) in the Solana ecosystem. Join him for insights that could shape Solana's future!
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Solana's Inflation History
- Solana's inflation mechanism was initially a fixed, time-based formula, not designed from first principles.
- Tushar Jain argues that Solana's emission schedule can be changed based on network needs, unlike Bitcoin.
Solana Inflation Mechanics
- Solana uses an inflation curve to reward stakers and validators for securing the network by staking SOL tokens.
- Validators propose and vote on blocks, and the rewards come from transaction fees and newly minted SOL tokens.
Crypto Inflation vs. Fiat Inflation
- The common view that inflationary coins are "shitcoins" is misguided.
- Anyone can permissionlessly stake SOL and participate in inflation, unlike fiat or stock-based compensation.