Solana validators are backing SGP-0003, a dual proposal that would lift daily SOL burns up to 14x and cut new token issuance faster, tightening supply from both ends.
Solana Ecosystem News
Solana (SOL) validators are moving toward a formal governance vote on a proposal package that would simultaneously increase the amount of SOL burned each day and reduce the rate at which new tokens enter circulation.
The package, called SGP-0003, combines two separate Solana Improvement Documents into a single governance proposal aimed at tightening the token's supply from both ends.
SOL was trading at around $74 at a market capitalization of approximately $43 billion as of Aug. 4. The token is well below its all-time high of $293, reached more than a year ago. Supporters of the proposal argue that tightening supply dynamics could improve the token's long-term value if demand holds or grows.
What the Two Proposals Would Actually Change
The first improvement document, SIMD-0553, would restructure how transaction fees are calculated. Under the current system, Solana charges a flat base fee per transaction, half of which is burned. SIMD-0553 would replace that with a resource-based fee model, charging transactions according to the network resources they actually consume. Under that structure, daily SOL burns would rise from approximately 650 SOL, worth roughly $48,000 at current prices, to between 7,500 and 9,000 SOL per day, worth up to approximately $668,000. That represents an increase of between 12 and 14 times the current daily burn rate. The new fee structure also introduces a fixed inclusion charge of 2,500 lamports per transaction paid directly to block producers, separating base compensation from the burn component.
The second document, SIMD-0550, targets new token issuance rather than existing supply. It would double Solana's annual disinflation rate from 15% to 30%, meaning the inflation rate falls twice as fast each year. Solana's long-term inflation target of 1.5% would remain unchanged, but the network would reach that floor in 2029 rather than 2032 under the current schedule. Over six years, the accelerated decline is estimated to remove approximately 18.9 million SOL from future issuance, leaving total supply roughly 2.6% lower than it would be under the existing path. That 18.9 million SOL is not removed from current circulation. It represents tokens that would never be issued in the first place.
Together, the two proposals attack supply from opposite directions. SIMD-0553 increases the amount of SOL permanently removed through network activity, while SIMD-0550 reduces how much new SOL enters circulation through staking rewards. Under sustained high network usage, analysts linked to the proposals suggest net supply growth could fall below the 1.5% terminal target in later years, creating periods where SOL supply contracts.
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Where the Vote Stands and Who Is Supporting It
The proposal is currently in the support phase, during which validators signal backing before it advances to a formal stake-weighted vote. As of Aug. 4, it had support from 63 million SOL, representing just over 14.4% of the network's staked supply. It needs to reach a threshold of 65.16 million SOL before the Aug. 18 deadline to advance. The gap was approximately 3 million SOL at the time of writing. Among the 73 validators that had signaled support were Helius, Jupiter, Staking Facilities, Drift, OtterSec and Solana Compass.
DeFi Development Corp. (Nasdaq: DFDV), the first US public company with a treasury strategy built around accumulating SOL, announced on Aug. 4 that it supports both SIMD-0550 and SIMD-0553 and plans to vote in favor if they advance. CEO Joseph Onorati said the proposals represent meaningful steps toward a more sustainable economic model for Solana. "SIMD-0550 would reduce the amount of new SOL entering circulation, while SIMD-0553 would increase the amount burned through network activity," Onorati said. "Together, they could improve SOL's long-term supply dynamics and allow more of the value created by the network to accrue to the token."
A previous and more aggressive version of a similar proposal, SIMD-0228, failed to gain enough validator support in March 2025. The current package is deliberately simpler in design, with SIMD-0550 making a single parameter change rather than restructuring the issuance model entirely. That simplicity is a response to the earlier failure. If the support threshold is cleared before Aug. 18, the proposal moves to a discussion phase before a formal validator vote.
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