Grayscale: ETH, SOL supply growth may fall below gold by 2031

Grayscale projects that if two pending tokenomics proposals are adopted, Ethereum’s annual supply growth could drop to about 0.4% and Solana’s to about 1.1% by 2031, figures the firm says are lower than gold’s roughly 1.8% annual supply increase. The estimates appear in a Grayscale research note that models Ethereum Improvement Proposal 8361 and Solana improvement documents SIMD-0550 and SIMD-0553.

EIP-8361, submitted for community review on Aug. 4, would increase the share of validator rewards that are burned as the staking ratio rises, phasing in an 18-month transition to burning 100% of validator rewards once about 60.25 million ETH is staked. Grayscale’s model shows annual issuance peaking near 0.5% at about a 20% staking ratio and then falling toward zero as staking approaches the roughly 50% mark.

Solana’s proposals are split between SIMD-0550 and SIMD-0553. SIMD-0550 would compress the network’s planned annual reduction in inflation-currently set to decline 15% each year to a 1.5% floor-into a shorter period. SIMD-0553 would increase the share of transaction fees that are permanently burned rather than returned to validators. Under current network conditions, Grayscale says the extra fee burn is modest relative to daily issuance, so SIMD-0550 accounts for most of the change toward the projected 1.1% annual growth in 2031.

The note compares the projected ETH and SOL issuance to bitcoin, which is already tracking to about 0.4% issuance by 2031. Grayscale states that slower issuance would reduce the flow of new tokens into circulation and that the proposals would lower validator and staker reward yields relative to current rules.

Grayscale’s ETHE fund began distributing staking rewards to shareholders earlier this year; the firm says any structural change to validator earnings would eventually affect payouts from spot crypto exchange-traded products and other funds that pass through staking income.

Neither EIP-8361 nor the Solana SIMDs are final. Both remain under community review and would require approval through their networks’ governance processes. Grayscale’s projections assume the changes take effect immediately and that other network conditions remain constant; the firm notes those assumptions may not hold exactly.

In the research note, Grayscale’s head of research Zach Pandl told clients, “Solana’s plan has broader support and is more likely to be implemented than Ethereum’s.” He noted the level of community backing matters for investors who might price in scarcity before any changes are finalized.