Solana Governance Votes on Economic Proposals That Could Slash SOL Issuance by $1.5 Billion

Solana validators and delegators are voting on two major economic proposals designed to accelerate SOL disinflation and significantly boost transaction-fee burns.
The formal votes cover SGP-0002 and SGP-0003, which correspond to technical improvement proposals SIMD-0550 and SIMD-0553. Voting runs through epoch 1023, expected to conclude around 15:30 UTC on Aug. 27.

SIMD-0550: Accelerated Disinflation Schedule

SIMD-0550 would double Solana’s annual disinflation rate from 15% to 30%. Rather than immediately halving current inflation, the proposal accelerates the annual rate of decline toward Solana’s target 1.5% terminal rate. Analysts estimate the network would reach this floor in approximately 2.8 years (early 2029) instead of the original 2032 projection.

The proposal's authors estimate that Solana would issue approximately 18.9 million fewer SOL over six years compared to the status quo. Based on 21Shares' price modeling, this issuance reduction translates to roughly $1.4 billion to $1.5 billion in value. This dollar figure remains subject to SOL market prices, implementation schedules, and precise activation timing.

Even with a successful SGP-0002 vote, SIMD-0550 will still require ongoing repository review and developer execution before the new inflation curve goes live.
 

Reduced Issuance and Impact on Staking Yields

21Shares projects that under the accelerated schedule, nominal staking yields could decline step-by-step:

Year 1: ~4.34% (down from ~5.25%)

Year 2: ~3.00%

Year 3: ~2.25%

These yield calculations incorporate total staking returns, which include transaction fees, priority tips, and Maximal Extractable Value (MEV) alongside protocol inflation. Consequently, shift in network adoption could alter actual yield outcomes.

The reduced reward structure has split institutional stakeholders. Nasdaq-listed treasury operator Solana Company voted against both proposals, warning that fundamental changes to monetary parameters introduce operational friction and make corporate yield forecasting unreliable. Staking rewards accounted for $2.512 million of the firm's second-quarter revenue.

SIMD-0553: Increased Daily SOL Destruction

SIMD-0553 restructures the current flat 5,000-lamport per-signature base fee into two distinct mechanisms:

Inclusion Fee: A 2,500-lamport fee routed directly to the block leader.

Resource Fee: A compute- and account-data-based fee that is completely burned.

The resource fee rate will scale via three feature gates up to a terminal rate of 0.5 lamports per requested cost unit. According to estimates from lead author Temporal, terminal activation could expand daily burns from ~648 SOL to between 7,500 and 9,000 SOL—a 12x to 14x increase under current transaction volumes.

The technical specifications were merged into the repository on July 20 following reviews by Firedancer and Anza engineering teams. Protocol implementation is slated for version 4.3, followed by testnet validation and staged activation.

Governance Requirements and Execution Roadmap

To pass, each proposal requires a minimum 33.3% network stake participation rate and 66.67% approval among cast votes (excluding abstentions). A prior 80% inflation-reduction proposal failed after securing 61.39% support, falling just short of the two-thirds supermajority.

A passing vote on SGP-0002 and SGP-0003 gives core developers the mandate to finalize code, execute testing suites, coordinate validator upgrades, and schedule feature-gate deployments. Long-term supply effects will depend on network adoption, validator performance, and activation timing.