Solana proposals could cut $1.5B in SOL issuance

Solana validators and delegators are currently voting on two economic proposals that aim to accelerate the network’s disinflation and increase transaction‑fee burns. The outcomes could lower the amount of new SOL issued and reduce nominal staking yields.

Proposal SIMD‑0550: Faster disinflation

SIMD‑0550 would double the annual disinflation rate from 15 % to 30 % while keeping the terminal floor at 1.5 %. The change would not halve inflation immediately; instead it would speed the decline toward the 1.5 % floor, reaching it in roughly 2.8 years (mid‑2029) instead of around 2032. Over a six‑year horizon the proposal projects about 18.9 million fewer SOL issued, a reduction valued at roughly $1.4‑$1.5 billion based on 21Shares’ SOL price assumptions.

According to 21Shares’ modeling, the faster disinflation path would lower nominal staking yields from about 5.25 % to 4.34 % in year 1, 3 % in year 2, and 2.25 % in year 3. These figures include protocol inflation and other reward components such as transaction fees and MEV, so actual yields could vary with network usage.

Proposal SIMD‑0553: Increased fee burns

SIMD‑0553 would replace the current 5,000‑lamport per‑signature base fee with a two‑part structure: a 2,500‑lamport inclusion fee paid to the block leader and a resource fee that is burned. The resource fee scales with computing and storage demand and is slated to rise through three feature gates, ultimately reaching half a lamport per cost unit.

Temporal, the design author, estimates that daily SOL burns could rise from roughly 648 SOL to between 7,500 and 9,000 SOL at present transaction volumes—a twelve‑ to fourteen‑fold increase. The estimate assumes current activity levels and full activation of the final fee rate; actual burns may differ.

Governance process and timeline

The formal votes correspond to SGP‑0002 (SIMD‑0550) and SGP‑0003 (SIMD‑0553) and run through epoch 1023, expected to conclude around 15:30 UTC on 27 August, though epoch timing can shift. Approval would provide a governance mandate but would not activate the changes immediately. Implementation would still require code finalization, testing, validator coordination, and staged feature‑gate activation (expected in version 4.3).

Approval thresholds require participation from at least one‑third of staked SOL and support from two‑thirds of participating stake, excluding abstentions. A prior 80 % inflation‑reduction proposal failed to meet the 66.67 % support threshold despite 61.39 % voting yes.

Stakeholder perspectives

Solana Company, a Nasdaq‑listed SOL treasury operator, voted against both proposals, citing concerns that core parameter changes could complicate institutional revenue and cost forecasting. The company’s Q2 revenue was largely derived from staking (approximately $2.5 million), making issuance reductions directly relevant to its business model.