Solana's SOL token is up more than 8% in the past 24 hours and has gained roughly 44% since the start of August, marking the network's strongest month since 2024 and pushing the token back above $105 for the first time since January.
The rally coincides with Solana's first-ever binding governance vote, which closes today at approximately 15:30 UTC when epoch 1023 ends. The vote bundles three proposals under Solana Governance Proposals (SGPs), a new on-chain system allowing validators and SOL token delegates to cast binding, stake-weighted votes for the first time.
The Governance Framework
One proposal ratifies the Solana Constitution, which formalizes how future voting will operate. The other two proposals address tokenomics changes that have drawn significant market attention.
Doubling the Disinflation Rate
Proposal SIMD-550, filed by Helius engineers, would double Solana's yearly disinflation rate from 15% to 30%. This accelerates the network's path to its fixed 1.5% inflation floor, reaching it by 2029 instead of 2032. The change would result in roughly 18.9 million fewer SOL created over the next six years.
However, the reduction comes with tradeoffs. Since inflation currently funds staker yields, cutting issuance would reduce staking yields from approximately 5.25% today to roughly 2.25% within three years. Some smaller validators could become unprofitable from the change.
Increasing SOL Burns
Proposal SIMD-553, submitted by Solana R&D firm Temporal, would increase SOL burns substantially by splitting transaction fees into an inclusion fee paid to validators and a new resource fee tied to computational usage that gets destroyed permanently. This change would increase daily SOL burns from approximately 650 SOL to as much as 9,000 SOL—a 12- to 14-fold increase depending on network activity. The proposal already cleared code review from Solana's two client teams, Anza and Firedancer, in July.
Institutional Opposition
Nasdaq-listed Solana Company, which trades as HSDT, is voting against both tokenomics proposals, though it backs the constitutional framework. The company cited timing rather than disagreement with the proposals' underlying goals, stating that predictable yield remains more important to institutional stakers at present than accelerating the supply reduction.
Both proposals require a two-thirds supermajority of participating stake to pass and are voted on independently, meaning rejection of one does not affect the other. Vote results are expected within hours of epoch 1023 closing.
