Solana Validators Pass 'Double Disinflation' Proposal

Solana's network validators have voted to pass a binding governance vote on three proposals, including one that doubles the rate of disinflation for the token SOL. The 'Double Disinflation' proposal passed by a narrow margin of 67.0% in favor (176.29M SOL) against 66.19M against, with 60.7% quorum participation. This means that Solana's inflation will decline faster from 15% to 1.5%, reaching the floor by 2029 instead of 2032, resulting in approximately 18.9 million fewer SOL created over the next six years.

The proposal, which tracks SIMD-550 filed by engineers at Helius, aims to reduce the yearly pace at which new-token issuance shrinks from 15% to 30%. This change could lead to a supply crunch and potentially boost the token's price long-term if demand increases accordingly. However, critics argue that this will also result in lower staking yields for validators.

Kraken, a cryptocurrency exchange with significant voting power, initially voted against the proposal but later changed its stance at the last minute. The exchange's Co-CEO Arjun Sethi stated, 'Custodians should be conduits, not voices.'