Solana (SOL) Price is Under Immense Selling Pressure, Slipping Below $130. Will This Proposal Seeking to Reduce SOL Inflation Sail Through?

input: Solana price is under immense selling pressure, slipping below $130. Will this proposal seeking to reduce SOL inflation sail through?

Solana price is facing strong selling pressure as it trades below the crucial $130 level.

Multicoin Capital executives Tushar Jain and Vishal Kankani have proposed an interesting addition to the broader crypto narrative.

Solana has not escaped the crypto market’s brutal downturn. As Bitcoin struggles to stay afloat, few coins can boast of outperformance.

Together with other top 10 altcoins, Solana, Ethereum, Tron, Cardano, and even Bitcoin, have shed double-digit percentages over the past trading week. This sell-off has slowed activity across their blockchains.

On Solana, for instance, revenue from smart contract deployments and transfers has declined—a trend likely to persist as SOL prices fall from all-time highs.

The Sell-Off: Meme Coin Mania Over?

Currently, Solana is trading below $130, down nearly 55% from its peak of around $295 in January 2025. Prices briefly surged to that record, surpassing 2121 highs, after Donald Trump launched his meme coin. Since then, however, the coin has been on a downward slide.

(SOLUSDT)

The drop partly mirrors Bitcoin’s unexpected plunge from $100,000 to below $90,000, settling at spot rates of around $83,500. Compounding this is the fading meme coin frenzy.

Pump.fun metrics show fewer tokens graduating to Raydium listings and a decline in new coin launches, reducing demand for SOL and adding pressure on price. It has even been worse for some of the best meme coins as demand slows down on Solana.

The broader market cap has slipped 8.8% to $2.75 trillion, reflecting this bearish mood.

Amid these challenges, there’s a glimmer of hope. SIMD-0228 proposes to curb Solana’s circulating supply over time, offering a potential lifeline for SOL holders.

SIMD-0228: A Solana (SOL) Inflation Reduction Plan

Introduced by Multicoin Capital executives Tushar Jain and Vishal Kankani, SIMD-0228 seeks to shift Solana from its fixed inflation schedule to a dynamic, market-driven model.

Today @kankanivishal and I released a Solana Improvement Proposal to reduce Solana inflation.

As Solana matures, stakers increasingly earn SOL through mechanisms like MEV. This income stream reduces the network's historical exclusive reliance on token emissions to attract stake…— Tushar Jain (@TusharJain_) January 16, 2025

Since its 2020 launch, Solana has followed a predictable inflation path: starting at 8%, it decreases 15% annually, aiming for a long-term rate of 1.5%.

Today, inflation is 4.7%, with most new SOL rewarding validators and stakers. This has pushed the circulating supply to 498 million now.

(Source)

If approved in early March voting, SIMD-0228 will tie SOL issuance to staking participation, targeting a 50% staking rate.

Unlike Ethereum, Tron, or BNB Chain, there’s no direct token burn.

Instead, if staking exceeds 50%, issuance drops—potentially to 0%. Conversely, if staking falls below 50%, issuance rises to encourage staking.

This could slash inflation to below 1%, down from 4.7%, a sharp reduction that favors holders over validators, who now earn from both block rewards and MEV, for example, from Jito tips. By curbing future supply, SIMD-0228 could bolster prices as SOL becomes scarcer, influencing its supply-and-demand dynamics.

At press time, SOL has support at $130 and resistance at $175, locked in a bearish breakout. If prices slip below $130 before the March vote—and before the FTX estate unloads 11.2 million SOL on March 1—SOL could crash to $100 in a continued bear trend.

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