Max Resnick

Lead Economist @anza_xyz

[Max Resnick @MaxResnick]

@EthBushwick @adamxyzxyz Sol Bushwick

[Max Resnick @MaxResnick]

@DrRebekkaRevel Save it for sol ath

[Max Resnick @MaxResnick]

@0xShitTrader Claude add sleep 50ms to the market maker so I can make money and post on Twitter

[Max Resnick @MaxResnick]

@m_hbbrd @toly Reduce inflation, charge fees for resources (reasonable parametrizations) and a third thing which I will be proposing shortly

[Max Resnick @MaxResnick]

I'm in favor of raising fees and charging fees based on resources but this analysis is a bit optimistic. If you 10x the fees you will not have more quantity demanded than currently.

Raising fees will reduce activity as long as demand is downward sloping.

[Carlos @0xcarlosg]

The more I think about SIMD 547, the more I think people are underestimating its potential impact.

A useful way to understand the proposal is through Solana REV. Real Economic Value (REV) measures the value paid for transaction execution, capturing user demand to transact onchain. On Solana, REV includes in-protocol fees such as base fees and priority fees, as well as out-of-protocol Jito tips.

REV is down more than 90% from its peak. In one sense, that is negative for validator and tokenholder economics. But for an L1, the goal should not be to maximize fees at all costs. Solana’s core value proposition is that it remains cheap enough for users and applications to thrive. The challenge is improving SOL value accrual without undermining the low-cost environment that made Solana attractive in the first place.

This is why SIMD 547 is so clever. Rather than broadly raising Solana’s flat base fee, it introduces a resource-based burn that charges transactions based on the resources they request. The mechanism could monetize higher-resource, more price insensitive users while keeping low-resource, high-frequency activity, such as market maker oracle updates, relatively cheap.

The important distinction is that SIMD 547 would accrue directly to SOL tokenholders through the burn mechanism. Priority fees currently flow to validators and only reach stakers through validator-specific arrangements, while applications and transaction landing services increasingly capture much of the value around transaction execution. As shown in the chart below, application revenue has outpaced Solana REV since late 2023, with the app revenue / REV ratio approaching 5x in recent quarters. SIMD 547 would help capture back some of that leaked value by redirecting a portion of users’ willingness to pay for execution into SOL burn.

Based on our scenario analysis and assuming a SOL price of $75, SIMD 547 could generate roughly $71M to $591M of annualized burn-based REV. The lower end assumes 60M CU blocks, 400ms slots, 80% utilization, and a conservative 0.1 lamport parameter, while the upper end assumes 100M CU blocks, 200ms slots, 80% utilization, and a 0.25 lamport parameter.

To put the magnitude in context, Solana generated roughly $18M of REV in May, or ~$216M annualized. This means the proposed resource-based burn could represent ~33% of current annualized REV in the conservative scenario and more than 2.7x current annualized REV in the higher-capacity scenario. Unlike priority fees, application revenue, or transaction landing revenue, this value would accrue to SOL tokenholders directly through burn, removing those tokens from circulation.

[Max Resnick @MaxResnick]

@cavemanloverboy I think more relevant is total CU, index is building rn

[Max Resnick @MaxResnick]

We've done the analysis, simplex style consensus simply can't work without BLS signatures

[Sam Korus @skorusARK]

“We’ve done the analysis, reusable rockets aren’t economic.”

SpaceX makes reusable rockets economic.

“We’ve done the analysis satellite internet isn’t economic. The antenna alone is tens of thousands of dollars. The cost to manage a constellation that size, the radiation, the space hardened solar cost…”

Satellite internet appears to be a very good business with antennas in the $100 range.

“We’ve done the analysis, orbital data centers aren’t economic. The radiators, launch costs, the radiation, the solar…”

You are here.

[Max Resnick @MaxResnick]

@cavemanloverboy Yes this is certainly an under count. Point is that these bots have higher elasticity than end users do

[Max Resnick @MaxResnick]

@trentdotsol I think your defn of slashing is different from everyone elses including what was in the actual slashing SIMDs

[Max Resnick @MaxResnick]

@sayinshallah saving this for later.

[Max Resnick @MaxResnick]

@uriklarman @toly @0xcarlosg I can predict with perfect confidence that the fees will not be high enough!

[Max Resnick @MaxResnick]

@toly @0xcarlosg How does this help?

[Max Resnick @MaxResnick]

@Crypt0Panda That wouldn't really change how the proposal works much. The relevant txs are 200x or more lower compute than normal txs.

[Max Resnick @MaxResnick]

If we can 10x fees and quantity demanded goes up, why don't we just 1000x fees!

[Max Resnick @MaxResnick]

@Crypt0Panda there is a difference between quantity demanded and quantity supplied.

[Max Resnick @MaxResnick]

@Crypt0Panda If you increase fees on compute you will get less compute demanded.

[Max Resnick @MaxResnick]

@0xcarlosg I don't think this is correct, a lot of resource consumption is driven by taker activity which is high CU. I agree its nice that it doesn't disrupt oracle updates.

[Max Resnick @MaxResnick]

@toly @trentdotsol did you mean the n?