After the introduction of SIMD 96, Solana's annual inflation rate jumped to 30.5%.
In this article: A week after SIMD 96 introduced a new preferred fee distribution model, Solana’s annual inflation rate increased by 30.5%.
SIMD 96 was the main factor behind the increase in Solana’s annual inflation rate, as half of the preferred fee is not used to burn SOLs and the entire amount goes towards network validation. This affected the real economic value (REV) distributed to #token holders: according to Onchain, token holders received 65.7% of Solana’s REV between February 3 and February 9, but between February 10 and February 16, this Solana’s #SOL tokens jumped 30.5% year-on-year after the introduction of SIMD 96 on February 12. The introduction of SIMD 96 reduced the number of SOLs burned per day from 18,000 SOLs to 1,000 SOLs, which affected the real the #Solana Improvement Document 96 (SIMD 96) proposed adjusting the prioritized fee structure and rewarding validators with 100% of the fees collected instead of using half of the fees to burn SOLs. Multicoin The SIMD 96 proposal, submitted by Capital partners Tushar Jain and Vishal Kankan, was to increase SOL inflation if the bid amount falls below 50% of the bid. Conversely, if the bid amount exceeds 50%, the REV ratio of token holders gradually decreased from 72% to 40.9% on Feb. 16, according to Onchain data, while the validator fee gradually increased from 25.1% to 56.1%. According to Blockworks researcher Carlos According to Campo, the weekly SOL burn rate from February 10 to February 16 reached 6.93%, the lowest level since mid-October 2024 and almost half of the previous week, which increased the annual SOL inflation rate from 3.6% to 4.7%. According to Campo, Solan enthusiasts According to Campo, Solan enthusiasts are currently awaiting the approval of SIMD 228, which reforms the SOL inflation mechanism into a dynamic factor based on the number of SOL deliveries. 3/ #The graph below shows the distribution of network REVs (pay and tip to stakeholders). . .
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