L1s are overpaying for security, but change is coming

Key Points

1. NEAR proposed halving its annual inflation rate from 5% to 2.5% due to insufficient fee burns and high inflation without corresponding benefits.

2. Celestia plans to reduce TIA issuance by 20x, from 5% to 0.25%, by paying validators a flat rate via off-chain governance.

3. Solana attempted to cut SOL inflation from ~4.4% to ~1% through SIMD-228, but the proposal failed; an alternative (SIMD-279) has not gained traction.

4. Ethereum reduced ETH inflation by ~90% post-Merge, while Avalanche and BNB Chain use fee burns to offset inflation (e.g., BNB's net supply dropped from 202M to 141M).

5. Bitcoin maintains a fixed issuance schedule with a ~0.85% annual rate via halvings, but lacks a burn mechanism.