Galaxy Warns Supply Cuts Won't Reprice ETH or SOL: Demand is King

Galaxy Research has weighed in on proposals to reduce token issuance rates on Ethereum and Solana, stating that supply cuts alone won't reprice ETH or SOL.

The company's Vice President of Research Lucas Tcheyan argued that demand is the driving force behind token prices, citing that 'demand decides where the tokens will go next.'

Ethereum developers are proposing a plan to slow down new token minting through a 'tapered issuance burn' mechanism, which would reduce validator rewards by 50% once half of all ETH is staked.

However, this proposal has drawn opposition from Aave founder Stani Kulechov and Sharplink CEO Joseph Chalom, who argue that validators could run at a loss after considering hardware and electricity costs.

Solana, on the other hand, is moving forward with two proposals through its new governance system: one to double the annual disinflation rate and another to replace flat per-signature fees with resource-based charges.