Key facts
- Solana validators are signaling support for proposals SIMD-0550 and SIMD-0553.
- SIMD-0553 aims to increase daily SOL burns from around 650 to up to 9,000 coins through resource-based transaction fees.
- SIMD-0550 seeks to accelerate Solana's disinflation schedule, reaching its 1.5% terminal inflation rate by 2029 instead of 2032.
- The proposals have received support from 24.94 million SOL, with Helius being a major backer.
- A 15% signaling threshold is required before a formal vote, with approximately 40 million more SOL needed.
Solana validators are signaling support for two linked governance proposals, SIMD-0550 and SIMD-0553, that aim to significantly increase the amount of SOL burned daily and accelerate the network's disinflation schedule. SIMD-0553 introduces resource-based transaction fees, which could lift daily SOL burns from approximately 650 coins to as many as 9,000 coins. At current prices, this represents an increase from about $47,000 to roughly $650,000 per day.
SIMD-0550 proposes to double the annual disinflation rate to 30%, bringing Solana's target of a 1.5% terminal inflation rate forward to 2029 from the original 2032 schedule. This change is expected to remove approximately 18.9 million SOL of emissions over six years.
The combined effect of these proposals is to increase the rate at which SOL is removed from circulation while simultaneously reducing the rate at which new SOL is issued. Solana's current inflation rate is near 3.8%, down from an initial 8%.
As of this week, the proposals have garnered support from 24.94 million SOL, representing 5.8% of the total staked SOL. This is about 38% of the way to the 15% signaling threshold required before a formal vote can take place. The deadline for signaling is August 18, meaning approximately 39.95 million SOL, or about $2.9 billion, is needed to advance the proposals. Validator Helius is a leading supporter, contributing 16.03 million SOL to the current total.