Solana’s Latest Vote Could Boost SOL Burns While Curbing New Supply
- Two of Solana’s three governance proposals could significantly reduce the pace of SOL supply growth by accelerating the network’s inflation cuts and increasing daily token burns from roughly 650 SOL to as much as 9,000 SOL.
- Solana validators began voting Sunday on three proposals, with two focused directly on changing the network’s supply dynamics. The voting period will end Thursday at around 15:30 UTC.
- The voting system is weighted according to the amount of SOL staked, giving validators and token holders who delegate their holdings a say in the outcome.
- SGP-0002 would accelerate Solana’s reduction in new token issuance. The network currently lowers its annual issuance rate by 15%, but the proposal would increase the reduction to 30%, allowing SOL to reach its inflation floor sooner.
- SGP-0003 would alter Solana’s transaction-fee model. One fixed portion of each fee would be paid to the block producer, while another portion based on the transaction’s computational requirements would be permanently burned.
- CoinDesk previously estimated that the proposal could lift daily SOL burns from approximately 650 to between 7,500 and 9,000 tokens. At Monday’s price, that would translate to around $61,000-$846,000 worth of SOL being removed from circulation each day.
- The proposed changes could create a tighter supply dynamic by reducing new issuance while increasing the amount of SOL destroyed. However, neither proposal directly addresses the demand side of the market.
- SGP-0001 does not involve SOL’s supply. Instead, it would formally ratify the Solana Constitution, establish a framework for governance decisions and activate the software used to conduct future votes. Solana protocol changes have historically been handled through informal coordination between developers and major operators.
- The simultaneous voting process creates an unusual governance wrinkle. SGP-0001 would formally establish the rules for Solana voting, yet SGP-0002 and SGP-0003 are already being decided through that same system. Their results could therefore be finalized before the framework governing the votes is formally ratified.
- SOL traded above $96 early Monday, rising 1.6% over the previous 24 hours and approximately 28% over the past seven days.
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