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ETH 
SOL Ethereum and Solana's token supply plan may make it more scarce
Changes in the token supply that Ethereum and Solana are reviewing could reduce its annual inflation rate. Zach Pander, director of research at Grayscale, pointed out that both networks are considering options to reduce new token issuance. By 2031, Ethereum's annual inflation rate could fall to about 0.4%, while Solana's could fall to about 1.1%, below gold and U.S. CPI inflation rates.
Ethereum and Solana review token supply
According to Pander, Ethereum and Solana are reviewing changes to their token economy models. Both networks use native tokens, whose price depends on supply and demand. The proposal would reduce the number of new ETH and SOL entering circulation each year. However, these changes are still being discussed in their respective communities.
Grayscale said the proposals could make the two tokens relatively scarcer. The report compares their projected supply growth with bitcoin, gold and U.S. inflation rates. By 2031, annual inflation rates for both Bitcoin and Ethereum could be close to 0.4%. Under the proposed changes, Solana's annual inflation rate could reach about 1.1%.
Proposed changes or reductions in annual inflation rates
According to Grayscale's comparison, these projected inflation rates will be lower than gold's 1.8% annual supply growth and lower than the U.S. CPI inflation rate of 3.3%. Pander said the proposed changes will reduce future token supply growth. He added that assuming other conditions remain equal, lower supply growth could support higher prices. However, the two networks have not yet adopted these changes. Grayscale said Solana's proposal has gained broader community consensus and is more likely to be implemented. The report did not give the same assessment of Ethereum, but instead described both sets of changes as proposals still under discussion.
New tokens received by pledgers may be reduced
These changes may affect holders of pledged ETH or SOL. The pledge reward comes in part from newly issued tokens generated by Internet inflation. If inflation falls, pledgers will receive fewer newly issued tokens. However, if demand remains sufficient, a reduction in circulating tokens may increase scarcity value. Pander believes that unpledged ETH and SOL holders may benefit from slowing supply growth. For pledgers, the outcome will depend on the trade-off between lower rewards and token prices.
Grayscale points out that ETH and SOL power blockchain networks for stablecoins and tokenized assets. Pander focused discussions on the proposal on supply growth and token issuance.
