Layer 1 (L1) blockchains are currently inflating their tokens to compensate validators, leading to significant concerns about inflation. Unlike fiat currencies, which are not subject to market competition, token holders can easily switch to less inflationary alternatives. To tackle sell-side pressure, several L1 networks are proposing to cut their inflation rates. NEAR recently suggested halving its inflation from 5% to 2.5% due to inadequate fee burns. Celestia aims to transition from proof-of-stake to a proof-of-governance model, reducing inflation from 5% to 0.25%. Additionally, Solana has attempted to revise its inflation curve, while Tron has successfully reduced its block rewards, resulting in a deflationary rate of ~1.29%. Ethereum has already decreased its inflation by around 90% following its shift to proof-of-stake in 2022. However, not all chains, like BNB Chain and Avalanche, are cutting inflation but are instead focusing on token burns to manage supply. Bitcoin remains unique with its block-subsidy halving every four years and lacks a mechanism to burn BTC, continuing to fuel discussions about its economic principles.

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