Solana upgrades or enhances the network, but validator income faces impact

The protocol upgrade of Solana will enhance the long-term stability of the network, but it may severely affect validator earnings. In March, Solana validators will vote on two proposals (SIMD 0123 and SIMD 0228), which could potentially reduce validator income by up to 95%.

The SIMD 0123 proposal requires validators to allocate Solana's priority transaction fees to stakers in order to increase staking rewards and reduce off-chain transaction protocols. The SIMD 0228 proposal adjusts the SOL inflation rate so that it is inversely proportional to the staking rate, in order to lower token dilution and selling pressure.

Matthew Sigel, Director of Research at VanEck, believes that although staking rewards may decrease, reducing inflation contributes to Solana's long-term sustainable development. (Cointelegraph)