title: Solana (SOL) Is Making a Huge Change That Could Affect Its Price and Future Growth

Solana is making a huge change that could affect its price and future growth. A new proposal called SIMD-228 aims to cut SOL's inflation by 80%

Solana is set for a huge change that could massively affect its price and future growth. A new proposal called SIMD-228 aims to slash SOL’s inflation by an incredible 80%, meaning fewer new SOL tokens will enter the market. So far, 71.85% of voters are in favor, likely pushing it through. But will this be enough to push SOL’s price back up, or does it need more than just an inflation cut to recover?

Solana's semi-deflationary system works by burning some SOL tokens during transactions, reducing the total supply. This helps control inflation and keep prices stable over time. However, recently, SOL’s network activity has dropped drastically, and transaction fees are at their lowest level in six months.

Solana's semi-deflationary system works by burning some SOL tokens during transactions, reducing the total supply. This helps control inflation and keep prices stable over time. However, recently, SOL’s network activity has dropped drastically, and transaction fees are at their lowest level in six months.

With fewer transactions happening, less SOL is getting burned, making it harder to control inflation. To fix this, SIMD-228 will decrease staking rewards, which is the main way new SOL tokens enter the market. Right now, SOL adds 6.8% more tokens per year, but with this new proposal, that number could drop by a massive 80%.

Solana's Price Drop and Lower Network Activity

At the moment, Solana's price stands at $123.9, and there are 509.38 million SOL in circulation. Factoring that in, Solana's total market value comes to $63.56 billion.

However, this is a far cry from January when SOL's market cap reached a high of $123 billion. Since then, prices have dropped by more than half. One of the biggest reasons for this decline is lower network activity and cautious investors.

However, this is a far cry from January when SOL's market cap reached a high of $123 billion. Since then, prices have dropped by more than half. One of the biggest reasons for this decline is lower network activity and cautious investors.

The SOL/BTC price chart also shows that SOL has fallen to its lowest value against Bitcoin in two years, further highlighting traders' lack of confidence.

Since fewer transactions are happening, fewer SOL tokens are also being burned in the process. This means that SOL's deflation system isn't working as well as before, putting more pressure on its price to stay afloat.

If SIMD-228 succeeds in reducing inflation and keeps validators motivated, it could help boost investor confidence and improve SOL's supply balance. However, for the price to truly recover significantly, Solana will need to see more users and transactions on its network.

Solana's plan to slash inflation by 80% has strong support, but its success will depend on how many people continue using the network. If network activity picks up, SOL's price could climb again. But if demand remains low, this change may not have a big impact. Investors will need to wait and see how the market reacts in the coming weeks.