Solana Weighs Two Proposals to Slow SOL Supply Growth

Altcoins

Solana is considering two separate changes to how SOL enters and leaves circulation.

Key Takeaways

Solana is considering two separate changes to its token economics. One would burn more SOL through transaction fees, while the other would reduce how quickly new tokens are issued to validators and stakers.

Validators are gathering support for SGP-0003, which asks the network to pursue the resource-based fee model described in SIMD-0553.

SIMD-0550 would separately accelerate the decline in Solana’s inflation rate.

Neither proposal is active on mainnet. They are also at different stages and would require separate governance, development and activation processes.

SIMD-0553 Would Charge Transactions by Resource Use

Solana currently charges a base fee of 5,000 lamports per signature. Half is burned, while the other half goes to the validator producing the block.

The flat charge does not reflect how differently transactions use the network. A simple transfer and an application requesting substantial computing capacity can pay the same base fee despite placing very different demands on validators.

The proposed model would divide the fee into two parts:

Priority fees would remain unchanged and continue going to the block leader.

Efficient transactions could pay less than under the current flat system. Applications that reserve large amounts of compute or account data could pay considerably more.

The resource charge would be based on what a transaction requests before execution, not what it ultimately consumes. Developers would therefore have a reason to set accurate limits instead of relying on oversized default budgets.

Wallets, RPC providers and decentralized applications would need to update their fee estimates before activation. Without those changes, users could see unexpectedly high costs even when a program uses only part of the capacity it requested.

The proposal also identifies a weakness in its earliest stage: very small spam transactions could initially face a lower minimum cost than under the current system. Later stages would raise the resource charge.

The 9,000 SOL Burn Figure Is a Projection

Solana currently burns around 648 SOL per day through the destroyed portion of its base transaction fee, according to the proposal.

Using network activity recorded in May 2026, the authors estimated that the resource fee could burn:

The final range would equal roughly 2.7 million to 3.3 million SOL per year.

Those figures are estimates rather than a guaranteed burn schedule. They assume that transaction activity and requested resource use remain broadly comparable with the May 2026 data used in the model.

Higher network activity or more resource-heavy transactions would increase the burn. Developers reducing unnecessary compute requests could lower the fee paid by each transaction. Higher costs could also discourage some activity and reduce the fees generated.

The model would therefore link Solana’s burn rate more closely to actual demand for network resources.

SIMD-0550 Would Reduce Future SOL Issuance

Solana’s annual inflation rate currently declines by 15% each year until it reaches a long-term floor of 1.5%.

SIMD-0550 proposes increasing that annual reduction to 30%.

The inflation rate would not suddenly be cut in half when the proposal takes effect. It would continue from its existing level and then fall more quickly each year.

Using an inflation rate of approximately 3.82% as of June 1, 2026, the proposal estimates:

The long-term target would remain unchanged. Solana would reach it almost three years earlier.

The proposal estimates that approximately 18.9 million fewer SOL would be created over six years, leaving total supply around 2.6% lower than under the current schedule.

This does not remove 18.9 million SOL already in circulation. It represents tokens that would no longer be issued compared with the existing inflation path.

How the Changes Could Affect SOL’s Supply

The two proposals would influence different parts of Solana’s supply growth.

SIMD-0553 would destroy more existing SOL when transactions use network resources. SIMD-0550 would reduce the amount of new SOL distributed through staking rewards.

Lower issuance would reduce dilution for existing holders. It could also reduce one source of recurring market supply because some validators and stakers sell rewards to cover infrastructure costs, taxes or other expenses.

Not every newly issued token is sold, however. Some rewards remain staked or are held, so 18.9 million fewer tokens issued would not translate into an equal reduction in selling pressure.

The proposals would also fall well short of making SOL immediately deflationary.

The fee model estimates that Solana currently issues around 60,000 SOL per day through inflation. Even the projected terminal burn of 7,500 to 9,000 SOL per day would initially remain far below that amount.

Faster disinflation would gradually narrow the difference between issuance and burns. Whether Solana ever reaches net deflation would depend on future network activity, transaction complexity, staking participation and the final fee rates adopted.

The more likely near-term result is slower supply growth rather than a shrinking total supply.

What the Proposals Could Mean for SOL’s Price

Burning more SOL and issuing fewer new tokens could improve the supply-demand balance if network use and investor demand remain stable or grow.

That does not guarantee price appreciation. SOL would still respond to broader market conditions, liquidity, demand for Solana applications and whether either proposal is approved and implemented.

The burn estimate also depends on activity remaining strong. If higher fees reduce transaction demand, the amount of SOL destroyed could fall below the modeled range.

The proposals are therefore more relevant to long-term dilution than to an immediate supply shortage.

Lower Inflation Would Reduce Staking Rewards

Faster disinflation would lower the nominal yield paid to SOL stakers.

The SIMD-0550 analysis models staking returns falling from approximately 5.84% to:

The estimates assume that around 68% of SOL remains staked. Actual returns would also depend on validator commissions, transaction fees and MEV income.

For holders, a lower nominal reward would be partly offset by slower dilution. Earning fewer SOL has a different effect when the overall supply is also expanding more slowly.

Validators face a more direct problem because their server, staffing and infrastructure costs would not automatically decline with inflation.

Among the 738 validators included in the proposal’s model, two could move from profitable or breakeven to unprofitable during the first year. That estimate rises to 13 after two years and 30 after three years.

These are model projections rather than forecasts for individual operators. They indicate that smaller validators relying heavily on inflation commissions could face greater pressure if transaction fees and MEV revenue do not replace enough of the lost rewards.

That could contribute to validator consolidation even though Solana would eventually reach the same 1.5% inflation floor under the current schedule.

The Fee Proposal Is Still Gathering Support

SGP-0003 remained in its support phase at the time of the latest governance snapshot.

Validators representing at least 15% of total active stake must express support before the proposal can move into discussion and formal voting.

Helius was the largest visible supporter, with approximately 16.03 million SOL, representing 3.70% of validator stake. Blueshift followed with approximately 3.6 million SOL, or 0.83%.

Other visible supporters included Solana Compass, Temporal, Ha1iad3, Cavey Cool and Harmonic Major.

This support is not a final vote to introduce the fee system.

Even if the proposal reaches the threshold and later receives majority approval, the vote would endorse pursuing the model. Developers would still need to implement it, test it and activate it through staged feature gates.

SIMD-0550 remains under review and would need its own approval and implementation process before changing Solana’s inflation schedule.

How to Judge the Proposals After Approval

For the resource-based fee model, the most useful evidence will be the final fee rates, how accurately applications set their resource limits and whether higher costs change transaction activity.

Users should also watch whether wallets and applications update their fee estimates before activation. Poor estimates could cause transactions to reserve more capacity than necessary and pay higher fees.

For SIMD-0550, the important figures will be staking participation, inflation-adjusted returns, validator profitability and whether transaction fees and MEV replace part of the lost issuance revenue.

Together, the proposals would make Solana more dependent on real network activity and less dependent on newly issued tokens.

That shift would work best if transaction demand remains strong enough to generate meaningful burns and support validators without making ordinary network use unnecessarily expensive.

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Author

Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP.

Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem.

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