Grayscale Projects ETH and SOL Inflation Below Gold Rate by 2031

Grayscale's latest supply analysis puts Ethereum and Solana on a path to becoming scarcer than gold within five years, provided key governance proposals pass on both networks.

The asset manager projects Ethereum's annual supply inflation could fall to approximately 0.4% by 2031, well below gold's estimated 1.8% yearly supply growth. Solana's issuance rate could slow to 1.1% over the same period, contingent on the successful passage of two pending network proposals: SIMD-0550 and SIMD-0553. If both projections materialize, each asset would sit below the gold benchmark that commodity investors have long treated as a baseline for monetary scarcity.

"Grayscale projects Ethereum's annual supply inflation could shrink to roughly 0.4% and Solana's to 1.1% by 2031 if two pending network proposals pass, pushing both issuance rates below gold's roughly 1.8% annual supply growth."

Grayscale, via report

The Ethereum side of the equation hinges largely on EIP-8363, a protocol change that would reduce the network's net consensus yield from 2.6% to 1.2%. That reduction in validator rewards directly constrains new issuance, tightening supply growth. Ethereum's transition to proof-of-stake in September 2022 already cut issuance dramatically relative to the proof-of-work era, and EIP-8363 would push that trend further. Solana's path is more explicitly conditional: SIMD-0550 and SIMD-0553 are governance proposals requiring community approval, and neither outcome is assured.

The gold comparison is a deliberate framing choice. Grayscale is positioning both assets within a scarcity narrative that resonates with institutional investors familiar with precious metals. Gold's 1.8% figure reflects new mine supply entering circulation annually, a rate constrained by geology and extraction economics. Cryptocurrency issuance is governed by code rather than geology, which makes the comparison imperfect but the directional argument clear: algorithmically enforced supply compression, if sustained, limits the dilution that erodes long-term holders.

Governance proposals are not legislation. SIMD-0550 and SIMD-0553 require Solana validator consensus, and contentious issuance changes have stalled on other networks before. EIP-8363 faces its own approval process on Ethereum. The five-year horizon introduces compounding uncertainty: network adoption trajectories, competitive pressure from other layer-1 blockchains, and technical changes that cannot be anticipated today all affect whether these projections hold.

Perhaps most consequentially, cutting Ethereum's staking yield from 2.6% to 1.2% could weigh on staking participation rates. If fewer validators stake ETH in response to lower rewards, the security model that underpins the entire network faces pressure. Grayscale's analysis does not appear to model that second-order effect in detail.

Scarcity alone has never been sufficient to support asset prices. Demand fundamentals, network utility, and broader macro conditions all factor into price formation. The proof-of-stake transition in 2022 was itself accompanied by significant deflationary episodes during periods of high on-chain activity, when fee burning under EIP-1559 pushed Ethereum's net issuance negative. Those deflationary windows demonstrated that supply mechanics matter, but they also showed that transaction volume is the variable that makes or breaks the supply equation. A low-activity network with minimal fee burning can still run inflationary even under a restrictive issuance schedule.

What Grayscale's report contributes is a structured, time-bounded framework for thinking about supply dynamics across two of the largest non-Bitcoin networks. The 2031 targets give governance participants a concrete benchmark against which to evaluate proposals like SIMD-0550 and EIP-8363. Whether those proposals pass, and whether the demand side of the ledger keeps pace, will determine whether the gold comparison ages as analysis or marketing.