Ethereum’s Pectra Upgrade and Solana’s Inflation Proposal: How They Shape the Future of SHIB and SOL

Two major blockchain networks, Ethereum and Solana, are currently making changes that could completely transform the ecosystems they have built.

In April 2025, Ethereum is planning the Pectra upgrade that will aim to make improvements to areas including scalability, staking, and transaction flexibility.

On the other hand, Solana is pushing SIMD-0228 forward, which may allow for its inflation model to be dynamically adjusted, which in turn could cut annual SOL issuance by up to 80%.

The implications of both upgrades are profound, as they do not just involve the blockchain but a lot of important projects built on top of them as well.

For example, Shiba Inu could be set up for success with an application-specific Layer 2 network called Shibarium when Ethereum finally rolls out this upgrade while essentially turning Sol into a blue-chip investment on Solana because of this specific upgrade proposal.

Let us deep dive into how both these transformative updates might change SHIB’s future as well as how it influences SOL and eventually the broader market.

Ethereum’s Pectra Upgrade: A Game-Changer for Shibarium

Ethereum’s Pectra upgrade combines the Prague (execution layer) and Electra (consensus layer) updates, improving Ethereum’s network efficiency, gas fee structure, and stake rewards. One of its most significant additions is Account Abstraction (ERC-4337), allowing users to pay gas fees in any ERC-20 token that they hold rather than only ETH.

Why It Matters for Shiba Inu and Shibarium

Shiba Inu’s Layer 2 blockchain, Shibarium, is secured and settled through Ethereum. With Pectra, users could hypothetically pay gas fees with SHIB/BONE or TREAT instead of ETH.

This can improve usability and adoption as the financial barrier for using dApps in the Shiba ecosystem would be lowered. Pectra can also have an impact on the SHIB staking pool, which might lead to better stake rewards and more liquidity within Shibarium.

Market Response

Anticipation surrounding Ethereum’s upgrade has fueled a surge in whale activity within the Shiba Inu ecosystem. Over 975.96 billion SHIB tokens were recently moved, reflecting a 206% increase in holdings among large investors. This trend suggests growing confidence in SHIB’s post-upgrade value appreciation.

Solana’s SIMD-0228 Proposal: Redefining SOL’s Economic Model

Unlike Ethereum, which is working to become more scalable and transaction efficient, the goal of Solana’s latest governance proposal, SIMD-0228, is to optimize its inflation model for a more sustainable economic structure.

At the moment, Solana has a fixed inflation schedule that starts at 8% per year and tapers off over time to 1.5%. Critics say this dilutes SOL’s value and disincentivizes long-term holding.

How SIMD-0228 Would Change Solana’s Inflation Model

The proposal is to replace the fixed inflation rate by a dynamic emissions model. If staking participation is above 50%, the inflation rate will be reduced and fewer new tokens will be minted.

In the opposite situation, where staking positions fall below 50% of the overall supply, the inflation rate will increase, thus more users will have an incentive to re-stake their SOLs.

Under this new model, potential gains for long-term holders are enormous in case its implementation works accordingly. Current annual ‌SOL’s ‌inflation‌ ‌would ‌drop‌‌ ‌from‌ ‌approximately‌ ‌4.694%‌ to 0.939%, reducing yearly token issuance from 27.93 million to 5.59 million.

If this proposal goes live, it means a huge reduction in new supply, which could effectively enhance Solana's attractiveness as an asset for long-term investors.

Potential Impact on the SOL Ecosystem

The SIMD-0228 proposal could reduce inflation and thus strengthen SOL’s value proposition as a scarcer asset while also improving staking rewards for long-term holders. This could lead to greater security of the network by incentivizing validators and delegators to stay involved.

There are concerns that validators may have reduced incentives, leading to negative impacts on decentralization. Solana co-founder Anatoly Yakovenko remains optimistic that the dynamic inflation model will find a good balance between security and economic sustainability.

Ethereum vs. Solana: A Comparative Look at Their Future

Ethereum is making transactions more gas efficient by allowing ERC-20 tokens to be used for gas fees. This is a game changer for projects like Shibarium, as it makes things much more accessible and removes dependency on ETH for transactions entirely.

Meanwhile, Solana’s proposed changes are all designed to reduce inflation, meaning SOL becomes a more valuable asset as less of it is issued.

Such changes would probably make both ecosystems more competitive, with implications for how developers, traders, and institutional investors think about Ethereum and Solana.

A Transformative Moment for SHIB and SOL

Ethereum’s Pectra upgrade and Solana’s SIMD-0228 proposal could mark a turning point for these two blockchains. If you think about Ethereum and the large amount of tokens launched on its network, with Pectra coming through, that will enable ERC-20 tokens to be used as gas fees, which in essence would probably mean that Shibarium is going to become more accessible and more usable if it happens. This is big news for the SHIB token beyond just speculation.

And with Solana having a lot of major quality projects like Serum/Solend/Lotsa and many other relationships built with top projects, the incentive to curb inflation (although I’m not aware) sounds like amazing long-term incentives to make SOL potentially much more stable and valuable long-term.