Galaxy: How Ethereum and Solana Are Cutting Inflation
Galaxy Research details how Ethereum's EIP-8361 could halve staking yields and Solana's SIMD-0550 speeds up disinflation, on a timeline that runs to 2028.
Issuance Becomes the Story
Galaxy Research has dragged the token-inflation debate out of developer forums and into the investment case. The report lines up how Ethereum and Solana each plan to cut the new coins they mint every year. Both leading proof-of-stake networks are chasing the same balance: keep the incentive budget high enough to pay for network security, low enough to limit dilution of the token. That trade-off is what decides how much a coin is really worth over a multi-year horizon.
Ethereum: EIP-8361 Halves the Yield
On the Ethereum side sits EIP-8361, the "Tapered Issuance Burn." It burns a rising share of validator rewards as more ETH gets staked. Galaxy reckons consensus-layer yields could fall to about 1.2%, roughly half of what validators earn today for securing the chain. The full effect, though, would not land until 2028. For stakers that means a shrinking yield edge well before tighter issuance can put a floor under the price.
Solana: Further Along, Stuck in Governance
Solana is more concrete on timing. SIMD-0550 would double the annual disinflation rate from 15% to 30%, pulling the point at which SOL hits its terminal inflation rate forward from 2032 to 2029. A companion proposal, SIMD-0553, would tie transaction fees to compute load and burn them in full. The catch is process, not math: Galaxy expects no inflation cut to clear a vote in 2026, and the latest attempt, SIMD-0411, looks set to be withdrawn without one.
The Trade
The signal is structural, not a catalyst. Fewer coins minted each year ease the standing sell pressure from staking rewards and lift ETH and SOL above purely inflationary altcoins. But the clock is long: 2028 for Ethereum's full effect, 2027 at the earliest for a Solana reform that still fails in 2026. Anyone buying the supply-squeeze thesis is buying years of patience, not a next-quarter trade. The sharper question is whether thinner staking yields push capital out of validator pools before scarcity ever bites. At a 1.2% consensus yield, Ethereum starts competing with short-dated Treasuries, and at today's rates that is a comparison it loses.