Grayscale: Potential Implementation of Ethereum and Solana Token Supply Reduction Plan Could Provide Price Support

August 14th, Grayscale's Director of Research, Zach Pandl, stated that the Ethereum and Solana communities are discussing adjusting the tokenomics, and the related code changes may lower the annual inflation rate of ETH and SOL, thereby reducing the future token supply. Under unchanged conditions, the slowed supply growth may provide support for the token prices.

Grayscale estimates that if the related adjustments are implemented, by the end of 2031, the annual supply inflation rate of ETH will decrease to around 0.4%, similar to BTC; SOL will be around 1.1%. In comparison, gold's annual supply growth rate is about 1.8%, and the U.S. CPI inflation rate is around 3.3%.

Currently, the proposed solutions are still under discussion within their respective communities. Pandl mentioned that the Solana proposal seems to have gained broader consensus, thus making its implementation more likely. If the proposal goes through, as staking rewards mainly come from new token issuance, ETH and SOL stakers will receive a reduced amount of tokens.

Pandl pointed out that the reduced supply may increase scarcity and create upward pressure on prices, benefiting holders of non-staked ETH and SOL; as for stakers, the benefits will depend on the net impact between the reduction in staking rewards and the potential price increase of the tokens.