What SIMD-0228 failing means for Solana

BWR analyst Carlos Gonzalez Campo explains the consequences of SOL inflation and transfers lost to “leaky buckets”

article-image

Shizume/Shutterstock modified by Blockworks

share

This is a segment from the Empire newsletter. To read full editions, subscribe.


We don’t really talk about SOL too much at Empire. Part of that is because, obviously, Blockworks already has a whole newsletter and podcast dedicated to it, and Jeff and Jack are far better at discussing Solana. I’d even go so far as to say Jack’s sense of humor rivals mine… But I’m not sure I want him to hold that over my head. 

Loading Tweet..

Anyway, I took a shallow dive down the SIMD-0228 lane, as I was curious to see what has some folks up in arms about the proposal. 

(If you’re nosy like me, you can also check out Jeff and Jack’s reporting on the SIMD here.)

Thankfully, I didn’t have to dig too deep before Blockworks Research’s Carlos Gonzalez Campo picked up the phone and filled me in.

Basically: Solana’s inflation rate sits at 4.6% right now, which — some argue — is too high. It’s set at 8% to start, with a yearly decrease of 15% (with a terminal rate of 1.5% in 2030). 

The resolution didn’t pass with the vote closing late last night, though Gonzalez Campo was leaning in favor of the proposal because he thought that the benefits outweighed the potential concerns.  

When asked what it means for SOL, Gonzalez Campo told me: “You continue to overpay for security and dilute naked SOL holders. SOL emissions also add selling pressure through what Max Resnick calls the ‘leaky bucket,’ defined as transfers lost due to taxes or middlemen with market power (e.g., validators like Coinbase or Binance that charge high commissions).”

The other side, he added, is that the so-called leaky bucket can be “viewed as a distribution spend, especially to institutions” which take a percentage of the staking yield but aren’t exposed to the underlying asset. 

So that’s your snapshot into Solanaland. If you want something more in depth, may I recommend the Lightspeed newsletter this afternoon?


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Industry City | Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

Brooklyn, NY

SUN - MON, JUN. 22 - 23, 2025

Blockworks and Cracked Labs are teaming up for the third installment of the Permissionless Hackathon, happening June 22–23, 2025 in Brooklyn, NY. This is a 36-hour IRL builder sprint where developers, designers, and creatives ship real projects solving real problems across […]

recent research

Research Report Templates.png

Research

Ethena Labs is leaping from its flagship synthetic dollar, USDe, to a full product suite—USDtb, iUSDe, and the Arbitrum-based Converge Chain—designed to marry crypto-native yields with TradFi-grade compliance. Our analysis shows how expanding into CME, ETF options, and tokenized Treasuries could lift protocol revenue from sub-$500 million in a bear case to several billion dollars if favorable regulation and institutional adoption align.

article-image

Bitcoin is still rising, 11 years after the documentary film The Rise and Rise of Bitcoin

article-image

Arch Labs CEO told Blockworks that the team plans to launch a native token, but declined to give details

article-image

CEO Mike Silagadze tells Blockworks that the US is “open for business” and why its DeFi bank offering is the first of many

article-image

Doing one thing well and leaving everything else out is often what disruptive technologies do best

article-image

Why an analyst is kicking off COIN coverage with “buy” rating