Blockchain
Solana Could Cut SOL Issuance by $1.4B Over Six Years, Here's How
Two Solana proposals could cut SOL issuance by $1.4 billion over six years, with daily burns set to jump 10x. Here's what changes and when.
BLOCKINSIDERLoadingTwo Solana proposals could cut SOL issuance by $1.4 billion over six years, with daily burns set to jump 10x. Here's what changes and when.
Solana is aiming to make SOL, its native token, scarcer and faster. Two recent governance proposals would cut new supply and burn more. This move, if accepted, could reduce issuance by approximately $1.4 billion to $1.5 billion over six years, as per recent research from 21Shares.
One of the two proposals is already live. The other one still needs a vote, and together they could mark one of the biggest changes to Solana's token economics since the network launched. Here is what each one does, in simple terms:
Solana's inflation, the rate at which new SOL is created to pay stakers, is designed to fall every year until it settles at 1.5%. That yearly reduction is called disinflation, and it currently runs at 15% per year.
SIMD-550 would double that pace to 30%. The same could help Solana reach its 1.5% terminal inflation rate in the first half of 2029 instead of around 2032, cutting years off the schedule.
There is a trade-off, however, which lands on stakers. With fewer new SOL being created, nominal staking yield is projected to fall to about 2.25% by year three, as per 21Shares. Validators, who live on those rewards, will be weighing exactly that when the proposal comes to a vote. It has not passed yet.
The second change needs no vote. It was approved and merged on 20 July. SIMD-553 introduces a burn fee on requested compute units from financial activity. What this means is that heavy financial transactions, like trading, will pay a fee that destroys SOL rather than recycling it.
The projected impact for now is large. Based on current network activity, daily SOL burns could rise from roughly 600-800 SOL today to about 7,500-9,000 SOL, a jump of around 10x.
Validators have publicly backed the mechanism, though the final fee design is still being worked out, which is why 21Shares frames the projections as estimates rather than certainties.
Put the two together, and the math is straightforward: fewer new coins printed, more existing coins destroyed. Over the next six years, that adds up to the $1.4 billion to $1.5 billion issuance cut in 21Shares' projection.
For holders, lower supply growth is generally supportive, provided demand holds up. The demand side has its own story right now: US spot Solana ETFs just crossed a record $1.2 billion in cumulative inflows after a five-day streak, and SOL traded near $96.70, up about 26% over the past month, as per recent data from CoinMarketCap.
For validators, the picture is more mixed. Faster disinflation means smaller staking rewards sooner, and the burn fee redirects value from fee income to supply reduction. How validator economics settle will shape the SIMD-550 vote itself.
That vote is the next marker to watch, along with the final SIMD-553 fee design. If both land as proposed, Solana enters 2029 with Ethereum-style burn mechanics and a fixed low-inflation schedule, three years ahead of its original plan. If the vote stalls, the burn upgrade alone still changes the supply math meaningfully. Either way, the days of 600 SOL burned per day look numbered.
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