Solana validators are close to advancing a governance proposal that would sharply increase the amount of SOL burned each day while cutting the rate at which new tokens are created.
The headline change is large in percentage terms and small in absolute terms. Burning ten times more of something you still create six times faster does not shrink the supply, and the proposal’s authors know that, which is why a second measure travels with it.
What SGP-0003 Would Change
The proposal bundles two previously introduced Solana Improvement Documents into a single governance package.
SIMD-0553 would move the network to resource-based transaction fees, meaning users pay according to the computing resources a transaction actually consumes rather than a flat rate. That would push daily SOL burns from roughly 650 SOL, worth about $48,000, to between 7,500 and 9,000 SOL, worth as much as $668,000, depending on how busy the network is.
SIMD-0550 would double Solana’s annual disinflation rate to 30%, pulling the network’s 1.5% inflation floor forward from 2032 to 2029.
A token burn permanently removes cryptocurrency from circulation by sending it to a wallet address nobody can spend from.
The number that puts it in proportion
Solana currently issues about 60,000 SOL every day. At the top of the proposed range, the network would burn 9,000 of them.
That is 15% of daily issuance. A more than tenfold increase in burns still leaves roughly 51,000 SOL a day entering circulation, which means SOL would remain inflationary by a wide margin. That is 15% of daily issuance. A more than tenfold increase in burns still leaves roughly 51,000 SOL a day entering circulation, which means SOL would remain inflationary by a wide margin. Describing this as a tighter supply is accurate only in the sense that supply would grow more slowly, not that it would shrink.
This is why SIMD-0550 matters more than the burn headline. Cutting the rate at which new tokens are created does considerably more to supply growth than burning a fraction of what is already being created, and pulling the 1.5% inflation floor forward by three years is the substantive change in the package.
Where the Vote Stands
The proposal is in Solana’s support phase, which is a signalling stage rather than the decision itself. As of Tuesday morning it had backing from 63 million SOL, just over 14.4% of the network’s staked supply, against a threshold of 65.16 million SOL. That leaves roughly 3 million SOL still needed before the 18 August deadline.
Clearing that bar does not enact anything. It moves the proposal to a discussion phase, after which a formal validator vote takes place.
The Solana Validator Governance dashboard listed 73 supporters, including Helius, Jupiter, Staking Facilities, Drift, OtterSec and Solana Compass.
Mert Mumtaz, chief executive of Solana infrastructure firm Helius, urged node operators and holders to signal support quickly in a post on X on 2 August, writing that anyone who wants the changes should ‘show support fast, no time to waste.’ Helius is among the listed supporters, so the appeal comes from a participant rather than an observer.
Who decides Solana’s monetary policy
The support phase itself is worth a moment. A $43 billion network is deciding its issuance schedule through a threshold of roughly 15% of staked supply, signalled by 73 entities, most of them infrastructure businesses and protocols that build on Solana.
That is how validator governance is designed to work, and it is more transparent than the way most monetary policy gets set. It also means a relatively small group of commercially interested parties is making a decision that affects everyone holding the token, and that most holders will have no direct say in it.
What it means for the token
SOL traded around $74 on Tuesday, giving Solana a market capitalisation of about $43 billion. The token is up slightly on the day and remains roughly 75% below its all-time high of $293, set more than a year ago.
Supply changes only matter if demand holds. Slowing the growth of a token’s supply supports its price in theory, and in practice a network with less activity burns less, so the burn increase delivers most when Solana is busy and least when it is not.
Traders on Myriad, a prediction market built by Decrypt’s parent company Dastan, are currently placing 70% odds that SOL reaches $40 before it reaches $160. That is a question of which level comes first rather than a forecast of a fall to $40, but it is not an optimistic read from the market on the token’s near-term direction.
