SGP-0002 passed, with a margin of 0.33 percentage points short.
Many people’s first reaction is that $SOL must be getting printed less, making supply tighter. On paper, that’s correct. Over the next six years, issuance will be about 18.9 million fewer tokens, and the terminal inflation rate of 1.5% will shift forward from mid-2032 to the first half of 2029.
But how the vote passed is more interesting than the numbers.
As of an hour before the deadline, it still hadn’t cleared. Kraken-related validators controlling about 2% of voting power switched from voting against to voting in favor. Galaxy at about 1.7% flipped from abstaining to voting with a majority in favor. Helius’s Mert said he made 500 phone calls over the past few hours, and they only managed to gather the votes in the final seconds.
This is Solana’s first time for network-wide binding governance. The constitutional proposal passed easily, while SGP-0003—which would have accelerated the burn of fees—did not pass, with about 54% voting in favor. That “issuing less can pass, burning more can’t” suggests validators are more willing to move what comes next in terms of the supply schedule, but less willing to move fee revenue in the present.
There’s another layer: a proposal is just direction. The actual issuance changes have to wait for the SIM D-0550 launch and activation. Passing the vote doesn’t mean tomorrow’s issuance will suddenly be lower.
The staking side will feel it first. Based on the proposal’s own calculations, in year three nominal staking yields drop to around 2.25%. Holders like less dilution; stakers will dislike thinner yields. The two groups aren’t the same people.
Personally, I’m not treating this as a short-term catalyst. More like a test: whoever was able to change their vote in the last few minutes would define the supply curve. On-chain governance’s first real-world execution was nearly held down by two institutional validator teams.
Next, we’ll see when the client pushes SIM D-0550 onto mainnet. Until it’s activated, supply follows the old schedule.
Do you care more about printing less, or more about staking yields being compressed?
The observations above do not constitute investment advice.
#Solana deflationary
Many people’s first reaction is that $SOL must be getting printed less, making supply tighter. On paper, that’s correct. Over the next six years, issuance will be about 18.9 million fewer tokens, and the terminal inflation rate of 1.5% will shift forward from mid-2032 to the first half of 2029.
But how the vote passed is more interesting than the numbers.
As of an hour before the deadline, it still hadn’t cleared. Kraken-related validators controlling about 2% of voting power switched from voting against to voting in favor. Galaxy at about 1.7% flipped from abstaining to voting with a majority in favor. Helius’s Mert said he made 500 phone calls over the past few hours, and they only managed to gather the votes in the final seconds.
This is Solana’s first time for network-wide binding governance. The constitutional proposal passed easily, while SGP-0003—which would have accelerated the burn of fees—did not pass, with about 54% voting in favor. That “issuing less can pass, burning more can’t” suggests validators are more willing to move what comes next in terms of the supply schedule, but less willing to move fee revenue in the present.
There’s another layer: a proposal is just direction. The actual issuance changes have to wait for the SIM D-0550 launch and activation. Passing the vote doesn’t mean tomorrow’s issuance will suddenly be lower.
The staking side will feel it first. Based on the proposal’s own calculations, in year three nominal staking yields drop to around 2.25%. Holders like less dilution; stakers will dislike thinner yields. The two groups aren’t the same people.
Personally, I’m not treating this as a short-term catalyst. More like a test: whoever was able to change their vote in the last few minutes would define the supply curve. On-chain governance’s first real-world execution was nearly held down by two institutional validator teams.
Next, we’ll see when the client pushes SIM D-0550 onto mainnet. Until it’s activated, supply follows the old schedule.
Do you care more about printing less, or more about staking yields being compressed?
The observations above do not constitute investment advice.
#Solana deflationary