Solana passes SGP-0002 to cut SOL issuance by 18.9 million tokens

Solana validators approved SGP-0002 with 67.001% support, doubling the annual disinflation rate to 30% and cutting projected SOL issuance by 18.9 million tokens over six years.

"Institutional adoption is a critical driver of Solana's growth, and institutions make decisions based on consistent, predictable structures," Joseph Chee, chairman and CEO of Nasdaq-listed Solana Company, said in opposing the change.

The vote drew 176.29 million SOL in favor, 66.19 million against and 20.63 million abstentions, with participation of 60.7% — 433.49 million SOL — exceeding the one-third quorum. Support cleared the two-thirds supermajority only after Kraken's validator, controlling about 8.91 million SOL, recast its vote from 100 percent against to 90.34 percent in favor with roughly six hours left. Galaxy Digital also shifted a portion of its abstention to support.

The faster schedule pulls Solana's terminal inflation target of 1.5 percent forward to about 2.8 years from 5.7 years, tightening supply as US-listed Solana ETFs have drawn about $1.7 billion in cumulative net inflows. Staking yields could fall to roughly half their current level within two years, according to 21Shares analysis.

Technical rollout still pending

SIMD-0550, written by Helius contributors Lostin and 0xIchigo, would raise the annual decline in SOL inflation from 15 percent to 30 percent. The change re-anchors the inflation formula at the activation slot to keep issuance continuous, and because inflation rewards affect Solana's bank capitalization and bank hash, every validator client must calculate the new schedule identically. The feature gate double_disinflation_rate must remain in client software permanently so nodes replaying history apply the correct rate. Solana previously considered SIMD-0228, which linked emissions to staking participation, but that proposal failed to reach quorum in March 2025.

Fee proposal rejected

Voters rejected SGP-0003, the Resource and Inclusion Fee proposal, with 53.9 percent support against the two-thirds threshold. The measure would have replaced Solana's flat 5,000-lamport base fee with a 2,500-lamport inclusion fee plus a resource-based charge, burning the full resource portion. Authors estimated daily burns of 1,500 to 1,800 SOL at the first stage versus the roughly 648 SOL burned daily today, though even the highest rate would equal about 0.5 percent of supply annually against inflation near 3.8 percent.

The outcome tightens SOL's supply profile while raising questions about validator economics and network security. The Bitwise Solana Staking ETF, holding 8.18 million SOL valued at about $622 million with 99 percent staked, reported a net staking reward rate of 5.84 percent — a figure that will decline under the faster schedule. Network activity remains strong, with July transactions reaching a record 4.2 billion, up 13.5 percent from June.

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