Multicoin releases Solana improvement proposal, proposing to adjust SOL issuance rate to a market-based solution

On January 17th, Multicoin Capital was one of Solana’s early investment institutions and is now attempting to change the inflation mechanism of the Solana network.
Tushar Jain and Vishal Kankani, two partners at Multicoin Capital, have submitted a proposal for Solana’s’ smart issuance ‘, proposing to adjust SOL’s issuance from the current fixed schedule to a market-based solution. Multicoin’s proposal may reduce SOL inflation.
In Solana terminology, inflation refers to the issuance of SOL by the network to validators who run Solana software and help build the blockchain. The verifier then passes on these issued SOLs and some MEV (miners can extract value) rewards to the pledger who entrusted them with SOLs.
Simply put, Multicoin’s proposal sets a target staking rate of 50% to ensure network security and decentralization. If the SOL pledged exceeds 50%, the issuance will decrease to reduce revenue and suppress the pledge. If the pledged SOL is less than 50%, the issuance will increase, increasing returns and encouraging staking. The minimum inflation rate is 0%, and the maximum is based on the current Solana issuance curve.
Solana’s inflation rate was initially set at 8% and will decrease by 15% annually until reaching an inflation rate of 1.5%. According to Solana Compass, SOL’s inflation rate is currently around 4.8%. Solana co-founder Anatoly Yakovenko stated in a podcast that the concept of fixed rate is borrowed from the Cosmos blockchain, and inflation is just an ‘accounting treatment’.