Solana Proposes Transaction Fee Overhaul to Slow SOL Supply Growth

Solana is considering two proposals to slow down SOL supply growth, one of which would increase transaction fees based on resource use.

The first proposal, SGP-0003, aims to introduce a resource-based fee model that would divide the base fee into two parts: a fixed inclusion fee and a dynamic resource fee. The latter would be burned in full, making it deflationary. This change could lead to 7,500 to 9,000 SOL being burned per day under current network activity levels.

The second proposal, SIMD-0550, suggests accelerating the decline of Solana's inflation rate from 15% to 30% annually until it reaches a long-term floor of 1.5%. This would reduce future SOL issuance by approximately 18.9 million tokens over six years, leaving total supply around 2.6% lower than under the current schedule.

The proposals aim to slow down supply growth and reduce dilution for existing holders, but they fall short of making SOL immediately deflationary. The burn rate would initially remain below the current issuance rate, and whether Solana ever reaches net deflation depends on future network activity and transaction complexity.