Solana News: Inflation Rate Surges by 30.5% Following Fee Distribution Changes

Solana's recent fee distribution model update has led to a significant increase in its annualized inflation rate, sparking discussions about the cryptocurrency's future.

Solana's Inflation Rate Jumps 30% Following Fee Distribution Changes

Solana’s (SOL) annualized inflation rate surged by 30.5% after implementing a new priority fee distribution model on February 12th. The daily amount of SOL burned decreased significantly, from almost 18,000 SOL to just 1,000 SOL. This shift was proposed in the Solana Improvement Document 96 (SIMD 96), which recommended allocating all priority fees to network validators instead of burning half of them. According to Blockworks researcher Carlos Gonzalez Campo, this adjustment elevated SOL's annualized inflation from 3.6% to 4.7%. Furthermore, between February 10th and 16th, the SOL weekly burn rate reached a low of 6.93%, the lowest since mid-October 2024 and about half of the previous week's rate. Additionally, SIMD 96 impacted the real economic value (REV) distributed to token holders, reducing their share from 65.7% to 58.9% in the week following the change.

Solana ETF filings officially entered Federal Register, potential approval in October

VanEck, 21shares, Bitwise, and Canary Capital have officially submitted filings for spot Solana (SOL) exchange-traded funds (ETFs) to the Federal Register on February 18th. The US Securities and Exchange Commission (SEC) has 240 days to review and either approve or deny the filings. Additionally, Grayscale's Solana ETF filing was added to the register on February 12th, with a potential approval date of October 16th. This news comes as SOL is experiencing a significant downturn, with a year-to-date crash of up to 42% following the debacle of the LIBRA memecoin promoted by Argentinian President Javier Milei.

Solaxy Crosses $22M Milestone in ICO – Aims to Solve Solana’s Congestion Issues

Solaxy, with over $22 million raised in its presale, aims to solve Solana’s congestion issues by processing transactions off-chain, bundling them together, and sending them back to Solana, streamlining the process without sacrificing security. This approach mirrors Ethereum’s successful Layer-2 solutions like Arbitrum and Optimism.

Solana Price Analysis: Struggles and Potential Rebound

Solana (SOL) has faced significant challenges recently, with its price dropping to a three-month low of around $160. Despite the pessimism, market analysis suggests a potential reversal, as extreme bearish sentiment often precedes a price shift. Traders' loss of confidence and panic selling could set the stage for a rebound.