Solana is progressing through two governance proposals, SIMD-550 and SIMD-553, designed to alter the network's supply dynamics over the next several years. Data from 21Shares indicates that the combined effect of these changes could reduce Solana's issuance by $1.4 billion to $1.5 billion over a six-year period.
Modifying Inflation and Burn Rates
Proposed by Solana infrastructure firm Helius, SIMD-550 seeks to double the network's annual disinflation rate from -15% to -30%. This adjustment brings forward Solana's timeline to reach its 1.5% terminal inflation rate from approximately 2032 to the first half of 2029.
Meanwhile, SIMD-553 was submitted by Solana research firm Temporal, approved, and merged on July 20. The proposal introduces a burn fee linked to the compute units utilized in financial transactions across the network. Under this structure, daily SOL burns are projected to increase from roughly 600 to 800 SOL up to a range of 7,500 to 9,000 SOL. Based on figures from 21Shares as of August 24, that range represented between $712,500 and $855,000 in daily value.
Impact on Staking Yields and Validators
The acceleration of disinflation is projected to reduce nominal staking yields. According to 21Shares data, Solana's staking yield sits near 5.25%, with protocol inflation comprising approximately 3.78% of that total. Under SIMD-550, yield could fall to roughly 4.34% in the first year and drop toward 2.25% by the third year.
Validator economics are also affected by the changes, with two of Solana's 738 validators projected to become unprofitable in the first year under current estimates. That figure could increase to 30 validators by the third year if fees rise as anticipated. At the same time, Solana's staking ratio remains near 67.93%, which is nearly double Ethereum's 34.14% ratio.
