Solana Company backs constitution, rejects 18.9M SOL issuance cut

Solana Company will back the network's proposed constitution while voting against two economic plans that would cut SOL issuance by 18.9 million tokens.

Solana Company will back the network's constitution but oppose two proposals that would cut SOL issuance by 18.9 million tokens as voting opens Aug. 22.

"Changing two of the network's most stable economic parameters during the first live governance cycle could delay decisions by firms already assessing Solana," Joseph Chee, chairman and CEO of Solana Company, said in an Aug. 21 press release.

The Nasdaq-listed operator, which trades under the HSDT ticker and runs institutional validator infrastructure across Asia-Pacific, will vote for SGP-0001, the Solana Constitution, while opposing SGP-0002, the Double Disinflation Rate proposal, and SGP-0003, the Resource and Inclusion Fee proposal. SGP-0002, tied to SIMD-0550, would double the annual disinflation rate to 30 percent from 15 percent, pulling the 1.5 percent terminal floor forward to about 2.8 years from 5.7 years. SGP-0003, via SIMD-0553, would replace the flat per-signature charge with a resource-based fee burned in full — a shift Galaxy Research estimates could lift daily SOL burns from roughly 650 tokens to between 7,500 and 9,000.

Each proposal needs support from at least 66.67 percent of the decisive stake to pass, and approval would serve as a policy instruction rather than executable code. SOL traded near $76.92 as of Aug. 21, up 7.2 percent, with the vote set to shape the token's supply arithmetic through 2029.

Staking revenue makes the vote material to Solana Company's accounts

Solana Company's opposition rests on timing rather than the proposals' goals. Management said institutions need economic rules they can model across several years, and that issuance itself has rarely been raised as a barrier in conversations with financial firms. The company said it may support another discussion on accelerating disinflation after SOL records sustained net capital inflows.

The issue is material to its own books. Staking generated $2.512 million of the company's $2.526 million in second-quarter revenue, with 31,200 SOL earned and automatically restaked. That helped produce a gross margin of about 97 percent, though operating costs and losses from digital-asset sales drove a $30.3 million quarterly net loss.

U.S. investors hold indirect exposure through HSDT shares and staking funds. Bitwise's Solana Staking ETF held 8.18 million SOL worth $622.02 million as of Aug. 9, with 99 percent staked and a 6.21 percent gross annualized reward rate over the prior 90 days.

A failed precedent hangs over the vote

The proposals cleared the 15 percent stake threshold for consideration on Aug. 5, with voting running through Aug. 29. A similar effort failed before: SIMD-0228, an earlier market-driven issuance plan, won 61.4 percent of ballots in March 2025 — short of the two-thirds supermajority required — as smaller validators opposed a cut to their rewards.

The authors model staking yields falling from 5.8 percent today to 2.2 percent by year three, a revenue hit that could push smaller operators out of business. Solana Company said it disclosed its positions before voting so delegators would know how their validator operator intended to vote; under the proposed constitution, the underlying SOL holder can override an operator's choice with a separate vote.

This article is for informational purposes only and does not constitute investment advice.