Solana Staking Yield Cut in Half Within Two Years

Solana's staking yield could be cut in half within two years as two governance proposals advance toward formal votes. The analysis from 21Shares estimates that SIMD-550 and SIMD-553 would reduce SOL issuance by $1.4 billion to $1.5 billion over six years. This is due to the proposals' changes to protocol inflation and staking economics.

SIMD-550 targets protocol inflation, which accounts for most of Solana's 5.25% staking yield. It would double the network's annual disinflation rate from -15% to -30%, moving the timeline to reach a terminal inflation rate of 1.5% from roughly 5.7 years to 2.8 years. This means that nominal staking yield would fall from about 6% to around 3% within two years, and to 2.25% in year three.

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

The proposals are designed to push capital out of staking and into the wider Solana economy. However, neither outcome is settled yet, as both proposals still require a two-thirds supermajority in stake-weighted votes to be approved.