Solana Proposals Target Inflation, Staking Yield in Network Overhaul

Two proposals, SIMD-550 and SIMD-553, are advancing towards formal votes on the Solana network. The proposals could reduce SOL issuance by $1.4 billion to $1.5 billion over six years and halve staking yield within two years.

SIMD-550 targets protocol inflation, aiming to double the annual disinflation rate from -15% to -30%. This would bring Solana's terminal inflation rate of 1.5% closer by H1 2029 instead of H1 2032. As a result, nominal staking yield is projected to fall to about 4.34% in year one, 3% in year two, and 2.25% in year three.

SIMD-553 adds a burn fee on requested compute units from financial activity. At current network activity, daily burns would rise from about 600 to 800 SOL to roughly 7,500 to 9,000 SOL, worth $712,500 to $855,000 as of August 24.

Staking yield compression is direct: staking income scales with nominal yield. A decline from roughly 6% to 3% would about halve staking revenue per unit of staked SOL. Solana's staking ratio sits near 67.93%, almost double Ethereum's 34.14%. The proposals are partly designed to push capital out of staking and into the wider Solana economy.

Neither outcome is settled, with both proposals still requiring a two-thirds supermajority in stake-weighted votes. Recent protocol changes show how these community votes can shift the final outcome.