EddieJayonCrypto

 28 May 24

tl;dr

Solana has approved a proposal (SIMD-0096) to allocate 100% of priority fees to network validators, departing from the previous 50/50 split between burning fees and rewarding validators. The decision, supported by 77% of votes, aims to increase rewards for validators responsible for network reliabil...

Solana has approved a proposal (SIMD-0096) to allocate 100% of priority fees to network validators, departing from the previous 50/50 split between burning fees and rewarding validators. The decision, supported by 77% of votes, aims to increase rewards for validators responsible for network reliability. The change is expected to take effect after several months and may impact inflation and Solana token economics.


Community reactions are divided, with concerns raised about potential inflationary effects and support for a more transparent fee structure. Solana's price has experienced a bullish shift amid these developments, with its market capitalization and trading volume also seeing significant increases.


The latest voting has ended with the result of 77% of votes for the proposal, which shows the support from the side of validators. This change is intended to increase the rewards for validators, which are the nodes responsible for the network’s reliability and performance.


In a statement made by Solana Labs Co-Founder, Anatoly Yakovenko, this update could enable stake pools with programmatically frozen tokens to be able to obtain all the tips and priority fees. For now, it will take several months to adopt this new allocation model as it is not available in the current version of Solana’s Mainnet-Beta software. Subsequent releases, such as 1.17 and 1.18, should include this feature as well as other enhancements such as the SIMD-0123 proposal to further optimize block reward distribution.


Priority fees in the Solana network are charged by users that want their transactions to be processed faster, especially during the rush hours. In this way, validators prioritize these transactions to guarantee the proper functioning of the network. Prior to this, 50% of these fees were burned, which some deemed as having a deflationary impact on the Solana token (SOL). All priority fees will go to the validators under the new model, which could increase their revenue but at the same time may also raise concerns over more tokens being created and resulting in inflation. Therefore, the decision has elicited divergent reactions within the Solana community.


A validator, Stakewiz, has voiced his opinion regarding the problem of Solana token expansion and its connection with inflation, predicting a 4.6% boost. They have emphasized that the activation should be gradual, and the activation of SIMD-0096 should be done simultaneously with the activation of SIMD-0123 to avoid any adverse financial effects. On the other hand, there are those in the community who support the change, saying that it will do away with off-chain side deals that are hard to follow, and will make the fee structure more transparent and fair.


Amid this development, the Solana (SOL) price has seen a bullish shift with the price exchanging hands at $170.53, a 5.56% surge from the intra-day low. Concurrently, SOL’s market capitalization and 24-hour trading volume surged by 5.59% and 9.47% to $76,662,006,334 and $2,633,171,068, respectively.

More about Emeren Group Ltd

Emeren Group Ltd develops, builds, operates, and sells solar energy projects. The company is headquartered in Stamford, Connecticut.

Industry: MANUFACTURING

Sector: SEMICONDUCTORS & RELATED DEVICES

Employees: 111699000

Revenue: $104,671,000

EPS: $1.852

P/E Ratio: -0.0891

Market Cap: $4.88

Dividend Yield: 3.42%

Beta: 1.128

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