A new Solana governance proposal aims to reshape how the network charges for computing resources, penalising wasteful transactions while cutting costs for routine activity and accelerating SOL’s burn rate in the process.
What SIMD-0553 Proposes
Solana Improvement Document SIMD-0553, authored by Cavey, a researcher at Solana infrastructure firm Temporal, would tie transaction fees to the computing resources each transaction requests rather than applying a flat charge regardless of complexity. The resource fee would be burned rather than paid to validators, removing SOL from circulation.
Cavey explained the current flaw plainly: ‘If I submit a transaction that does nothing versus a transaction that burns 200 million CPU cycles, I’m charged the same amount.’
The proposal entered Solana’s onchain governance process in early August and cleared its initial support phase on August 4. It then moved into the support and discussion phase, which typically runs for seven epochs, or roughly two weeks.
Who Pays More, Who Pays Less
Under the proposed terminal fee rate, modelling from Temporal projects stablecoin and token transfers becoming roughly 20% cheaper, vote transactions around 12.3% cheaper and oracle updates roughly 16.9% cheaper. Moving the other way, a high-priority swap through DFlow would cost 9.72% more, a mid-priority OKX swap 301% more, and a pump.fun swap at zero priority 3,150% more.
Cavey argued that even the most compute-intensive transactions would cost around $0.05 under the model, compared with $2 to $5 fees for a $100 swap on a centralised exchange.
The proposal specifically targets computationally wasteful arbitrage. Cavey cited data showing that over the past 30 days, five traders with the highest failure rates submitted 11.5 million transactions consuming 929 million compute units, across 2,477 trades that generated $16,091 in profit, while paying only 78 SOL in fees.
The SOL Burn Impact
SIMD-0553 would significantly increase SOL’s daily burn rate. The current daily burn of approximately 648 SOL could rise to between 7,500 and 9,000 SOL at the proposed terminal fee rate, representing a 12 to 14-fold increase if current resource demand holds steady.
Solana currently issues roughly 60,000 SOL per day, meaning even a 9,000-SOL daily burn would not alone make the token deflationary. A separate proposal, SIMD-0550, would independently reduce inflation faster than currently scheduled. Cavey said deflation would be ‘a nice secondary effect’ rather than the primary objective, but added: ‘If Solana wins, there’s a chance that Solana could actually become a deflationary currency.’
Pushback From Validators and Contributors
Reducing validator income has drawn criticism. Validators could initially see base-fee revenue fall by around 4%. Contributor bji wrote on GitHub: ‘I like the aspect of this proposal that gives tx submitters extra incentive to be accurate with CU limits. Everything else I’m meh to negative on. More burn should not be a goal. Validator incomes should not be arbitrarily reduced.’
Another contributor, mschneider, questioned why fees should be based on requested resources rather than actual usage, stating that ‘units used seems more natural.’ Cavey responded that basing fees on requested resources lets users know the cost upfront and allows validators to verify affordability before processing.
Cavey said the parameters can be adjusted to offset the validator revenue impact if needed, and described the primary goal as aligning incentives across developers and core contributors: ‘That is objective number one, and that is enough of a reason for this proposal, in my opinion.’
