Solana Proposes Radical Overhaul of Monetary Policy

Solana's proposed monetary policy changes could significantly reduce token issuance and increase burns, potentially cutting staking yields in half within two years. The proposals, SIMD-550 and SIMD-553, aim to double Solana's annual disinflation rate from 15% to 30%, which would push staking yields toward 2.25% by year three.

According to 21Shares, the proposals could cut SOL emissions by up to $1.5 billion over six years. However, this comes at a cost: lower income for stakers in exchange for a tighter long-term supply profile for SOL.

The proposed changes would also increase token burns tied to requested compute units, potentially rising daily burns from 600 to 800 SOL to between 7,500 and 9,000 SOL. This could change the supply trajectory of SOL.