Demand, not inflation control will determine Ethereum and Solana price, Galaxy Research

Galaxy Research has told its clients what it thinks about the proposals that Ethereum and Solana are both considering to reduce token issuance rates on their networks. 

The company also warned that the changes to supply will not be the only factor that affects the prices of either asset, arguing demand does that job.

How do Ethereum developers plan to reduce token issuance? 

Galaxy Vice President of Research Lucas Tcheyan wrote in a note to clients that demand decides where the tokens will go next. The context of his comments is that developers on both the Ethereum and Solana chains are proposing plans to slow how fast new tokens are minted. 

Ethereum’s Proposal (EIP-8361) introduces a “tapered issuance burn” that would burn validator rewards down to zero once 50% of all Ether (ETH) is staked. At today’s staking rate of about one-third of supply, consensus-layer yield would drop from about 2.6% to 1.2%. 

The proposal, which was filed by six researchers including the Ethereum Foundation’s Justin Drake, would be adopted over an 18-month period, giving stakers close to two years to react. 

… Continue reading the full article at the original source below.