Solana Validators Vote to Double Disinflation Rate, Cutting Planned Issuance

Solana's validators have voted to double its disinflation rate, reducing the planned issuance of SOL tokens over the next six years. The proposal passed by a narrow margin, thanks in part to a last-minute switch from Kraken's 8.9 million SOL vote from against to for. This change will slow down SOL's supply growth, with an estimated 18.9 million fewer tokens being issued over six years, equivalent to around $2.2 billion at the current price.

The disinflation rate was previously set to decrease by 15% annually until reaching a floor of 1.5% in 2032. The new rate doubles this reduction to 30% per year, pushing the floor to be reached in the first half of 2029. This change will affect staking yields, with the first-year yield estimated to fall from 4.93% to 4.34%, and by year three, it will drop to 2.25% compared to 3.52% previously.

The vote's outcome was influenced by key network players, with Kraken and Galaxy Digital switching their votes just before the deadline. This decision has significant implications for validators who operate staking businesses, as they may become unprofitable within three years due to lower staking yields.