Solana to reach 1.5% inflation floor by 2029 after validator vote

Solana validators approved a proposal to double the rate at which SOL inflation declines, accelerating the network’s path toward its long-term 1.5% inflation floor.

The proposal, SGP-0002, passed with 67% of participating stake in favor, narrowly clearing the required 66.67% threshold. It received support representing 176.29 million SOL, compared with 66.19 million SOL against.

The measure implements SIMD 550, a proposal developed by engineers at Helius that increases Solana’s annual disinflation rate from 15% to 30%.

Solana’s inflation rate already declines each year. Under the new schedule, the network is expected to reach its 1.5% inflation floor in 2029 instead of 2032.

The change is expected to result in roughly 18.9 million fewer SOL being issued over the next six years, reducing future supply growth.

Lower issuance will also reduce staking rewards. 21Shares estimates Solana staking yields could fall from about 5.25% currently to around 2.25% within three years.

The vote was part of Solana’s first binding governance process conducted through the Solana Governance Proposal system.

Kraken initially opposed the disinflation proposal before withdrawing its vote near the end of the process. Galaxy also moved from abstaining to supporting the measure.

Validators separately approved SGP-0001, which formalizes Solana’s governance framework. The proposal passed with 86% support.

A third proposal, SGP-0003, failed to secure the required two-thirds majority. The measure would have introduced a resource fee tied to transaction compute usage and significantly increased the amount of SOL burned each day.

SOL entered the vote after gaining roughly 44% during August. The token later fell after SGP-0003 failed, with Coinbase data showing SOL closing August 28 at $105, down 3.83% from its daily open.