Solana Governance Vote Aims to Rebalance Network Economics

Solana's SOL token has been trading above $109, up about 50% this month. The Solana network is undergoing a governance vote, which could slow down the creation of new SOL and increase the amount burned every day.

Validators are casting their first governance vote on three proposals: SGP-0001, SGP-0002, and SGP-0003. These proposals aim to ratify a Solana Constitution, double the network's annual disinflation rate, and divide the flat per-signature charge into two parts.

SGP-0001 has 95.33% support, while SGP-0002 has 68.63%. However, SGP-0003 has only 62.63% yes votes, falling short of the required two-thirds majority.

The proposed changes could significantly impact Solana's staking yield and inflation rate. According to Cryptopolitan, if SGP-0002 is approved, staking yield would start at 5.84%, then decline to 4.34% after a year, 3% after two years, and 2.25% after three years.

The increased burn rate could offset around 14% of new supply, despite inflation still creating about 64,000 SOL every day. The Solana Company has endorsed the governance framework but voted against both economic proposals, citing timing rather than goals.