# Proposal For Introducing a Programmatic, Market-Based Emission Mechanism Based on Staking Participation Rate

**URL:** <https://forum.solana.com/t/proposal-for-introducing-a-programmatic-market-based-emission-mechanism-based-on-staking-participation-rate/3294>\
**Category:** Governance\
**Tags:** simd\
**Created:** [February 25, 2025, 12:03am UTC](https://forum.solana.com/t/proposal-for-introducing-a-programmatic-market-based-emission-mechanism-based-on-staking-participation-rate/3294 "2025-02-25T00:03:16Z")\
**Posts on this page:** 1\
**Showing post:** 21

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**Author:** ![MaxSherwoodH2O](https://yyz2.discourse-cdn.com/flex030/user_avatar/forum.solana.com/maxsherwoodh2o/32/834_2.png) [@MaxSherwoodH2O](https://forum.solana.com/u/MaxSherwoodH2O)\
**Post date:** [February 27, 2025, 10:30am UTC](https://forum.solana.com/t/proposal-for-introducing-a-programmatic-market-based-emission-mechanism-based-on-staking-participation-rate/3294/21 "2025-02-27T10:30:45Z")

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Firstly I want to thank the authors for this well-constructed proposal.

However, I disagree with this proposal.

While it’s true that many validators are arguably earning “too much” at the moment, it’s also true that many of us [operated at break-even or at a loss](https://youtu.be/lDGKjMxDgsM?si=dqOfQVrTBIJ4ps_Z&t=1063) during the years of 2022 and 2023. Block rewards and MEV were non-existent, and we depended on commission on voting rewards to survive. When the bull market started, many of us moved to a 0% voting commission fee and a 0% MEV commission fee, earning just the block rewards. But block rewards vary extremely from epoch to epoch depending on volatility in the market day-to-day. MEV is the same. Once the bull market is over, I expect block rewards and MEV to significantly decrease, requiring many validators to raise commissions and once again depend on voting /inflation in order to stay profitable.

Solana is one of the few networks with a large, permissionless set of validators. However, the distribution of stake is very long-tail.

 ![image](https://canada1.discourse-cdn.com/flex030/uploads/solanafndn/original/1X/d90baa8c54ce28a8a1780e62034e67720f49871e.png)  
If you imagine that the break-even point (how much stake does a validator need to break even) depends on the current MEV, block rewards, and inflation / voting rewards, it’s not hard to image a scenerio where this proposal passes, reducing inflation by 80% as stated previously, then a bear market reduces MEV and block rewards by 80% or more, and suddenly we go from 1500+ profitable validators to 150. [For me, one of Solana’s strengths is it’s decentralization](https://ultimate.app/blog/why-solana-is-more-decentralized-than-you-think), (despite what the nay-sayers would have you believe) and it would be hugely bearish for the validator set to reduce by 80% or more in the name of saving 3 or 4% per year in inflation.

Additionally, I also agree with the previous points that a “dumb” curve is actually much easier to understand and model, whereas a “smart” curve is more complicated and unpredictable.

I do understand the reasoning behind this proposal, but I think it would be exceptionally poor timing to pass this during the height of the bull market. I am fully supportive of revisiting this in a year’s time when we can see evidence of persistent MEV and block rewards over more than a few quarters.

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_[View the full topic](https://forum.solana.com/t/proposal-for-introducing-a-programmatic-market-based-emission-mechanism-based-on-staking-participation-rate/3294)._