Kraken Flips on Solana Governance Vote, Deflationary Proposal Still Short of Victory

Solana's on-chain vote for tokenomics reform has reached its final hours, with a surprising turn of events. Kraken, one of the largest exchanges by SOL holdings, initially opposed the deflationary proposal but has now reversed its position under pressure from the retail community.

The proposal in question, SGP-0002 (Double Disinflation), aims to double the disinflation rate from 15% to 30%, reducing SOL issuance by 18.9 million tokens ($1.5 billion) and reaching a terminal inflation rate of 1.5% as early as 2029.

The related SGP-0003 initiative, aimed at increasing daily transaction fee burning, has already failed due to lack of support from major validators.

Despite Kraken's change of heart, the outcome is still uncertain, with supporters of the deflationary proposal needing a further 1.52 percentage points to reach the required two-thirds approval threshold of 66.67%.