Company: FWDI
Filing Date: 2025-12-11
Form Type: 10-K
Source: 0001683168-25-009068
Chunk: 5

Company: Forward Industries, Inc.
Filing Date: 2025-12-11
Form: 10-K
Item: Item 1
Chunk 5
---
 the community, the foundation and investors. New SOL are brought into existence primarily through inflationary
rewards distributed to validators and delegators. The SOL staking yield is made up of three primary components: inflationary rewards,
transaction/priority fees, and maximal extractable value. Inflationary rewards started out at 8.0%, and are currently 4.3%, and will fall
15% every epoch-year until they reach a long-term floor of 1.5%. Unlock schedules applicable to these allocations may periodically increase
circulating supply, creating potential selling pressure and adversely affecting the price of SOL. Historically, 50% of all transaction
fees were burned (with the other 50% going to the validator), but now all transaction fees go to the validator after the passage and adoption
of the Solana Improvement Document 96.

How SOL is Used

SOL is used as part of Solana’s
proof-of-stake consensus mechanism. In general, proof-of-stake blockchains have block producers called validators that run nodes, bond
or stake the protocol’s native token, propose blocks when chosen to do so, and validate/sign the transactions and blocks of others
when not proposing such blocks. Validators are chosen to produce a block in proportion to their stake, which makes it extremely costly
for bad actors to attempt to control the network and add invalid transactions to the blockchain. Validators receive staking rewards for
the work they perform, which further incentivizes validators to behave properly, as they would otherwise miss out on such rewards. Other
proof-of-stake networks often “slash” some or all of a validator’s stake if it intentionally or unintentionally performs
its duties poorly, for example, by double-signing a transaction. Solana, however, has not implemented slashing at this time. In addition
to its use within consensus, SOL is also a “gas token,” meaning that users of the Solana blockchain pay SOL to validators
(and delegators) as compensation for processing their transactions.

We believe there are three particularly
notable items giving Solana a technical advantage compared to many smart contract blockchain peers. Solana’s proof-of-history gives
validators a notion of time and allows them to produce blocks without requiring the network to first agree upon the current block, resulting
in speed advantages. Further, unlike peer blockchains that often use single-threaded virtual machines, Solana enables parallel transaction
execution to increase throughput and take advantage of future hardware improvements resulting from increased CPU core counts. In