Solana Staking Yields Plunge as Disinflation Rate Doubles

Solana staking yields are set to fall in the coming years due to changes implemented through two proposals, SGP-0002 and SIMD-0550. The disinflation rate, which determines how quickly new SOL tokens are issued, will be doubled from 15% to 30%, reducing the supply of new coins by approximately 18.9 million over six years.

The cut in issuance is expected to reduce the staking yield from around 5.25% today to roughly 2.25% within three years, with intermediate steps at approximately 4.34% and 3%. This change will primarily affect validators and stakers who receive SOL as rewards for their participation in securing the network.

However, a proposed fee reform, SGP-0003, which aimed to provide a counterweight to the reduced issuance by burning more coins, failed to pass with a 53.9% approval rate. The proposal would have split transaction fees into two parts and burned a portion of them directly, tightening supply without affecting staking rewards.

The disinflation rate has not yet changed, as its implementation is still pending the resolution of technical issues related to reward calculations. Once resolved, the new disinflation rate will be activated through a feature gate, which will reduce the issuance of new SOL tokens in subsequent epochs.