17 Sep 2021 7:14 AM +00:00

Solana Max Supply: Does Solana Have A Hard Cap?

Solana has seen enormous growth over the past few months, but when it comes to tokenomics, does is there a max supply of SOL?

Described as a potential ‘Ethereum Killer’, SOL rose to sixth place in the cryptocurrency rankings by market cap in early September, before dropping back down to seventh place a few days later. Following some network issues earlier this week, SOL’s price is $160.43 at the time of writing. This is down 23.80% in the past seven days.

Here’s a look at the max supply of SOL.

Advertisement

Solana Max Supply of SOL

Solana does not have a fixed max supply of SOL. Instead, what is fixed is the inflation rate YOY.

The current total supply is 504,095,110 SOL, with a circulating supply of 296,693,628 SOL as of September 2021 (via Solana).

When the Solana network first launched, it had an initial total supply of 500,000,000 SOL. However, the Solana Foundation previously burned 11 million SOL. This reduced the total supply down to around 488,000,000 SOL.

While 488,000,000 SOL is often touted as the max supply cap, Solana’s inflation schedule shows this is not the case.

With new SOL rewarded as Solana staking yield, Solana’s initial inflation is at 8%. This inflation rate will reduce 15% year on year until it settles on what Solana described as its ‘Long-term Inflation Rate’ of 1.5%.

According to SolanaBeach, Solana’s total inflation is currently 7.07%.

Advertisement

Based on the Solana inflation schedule, Solana will hit this inflation rate after 10 years.

From Solana’s inflation proposal, the total supply of SOL will reach 550,000,000 after two years. By the eighth year, it should hit 700,000,000. After reaching its long-term inflation rate, it will consistently increase by 1.5%.

However, as Solana notes, this is an “upper limit on the amount of SOL issued via inflation”, as it does not account for the destruction, or burning, of any SOL.

Read More: Solana Roadmap: What New Updates Are Coming To Solana?