According to Milk Road, Solana's Proof-of-Stake mechanism mints new tokens with an annual inflation rate of around 4.5%, directly increasing the circulating supply and introducing consistent downward pressure on SOL prices. This inflation-driven supply growth can dilute existing holders, impacting trading strategies and risk management for investors holding or trading Solana. Monitoring Solana’s inflation metrics is critical for crypto traders seeking to anticipate potential price swings and understand the underlying tokenomics that affect market sentiment and liquidity (source: Milk Road via Twitter, May 15, 2025).