Solana validators approved a proposal to double the network's annual disinflation rate, with the measure clearing the two-thirds supermajority requirement by just 0.33 percentage points. SGP-0002 passed with 67% support against 25.16% opposition and 7.84% abstentions, on a turnout of 60.7% of eligible stake.
The vote's outcome hinged on a last-minute decision by Kraken. The exchange initially voted against both supply proposals at 12:33 UTC on August 28, dropping support below the required 66.67% threshold with less than three hours remaining. By the vote's close at 15:00 UTC, Kraken reversed course, casting over 90% of its approximately 8.9 million SOL of voting stake in favor.
Accelerated Path to Terminal Inflation
SGP-0002, tied to SIMD-0550, would double Solana's yearly disinflation rate from 15% to 30% while maintaining the network's long-term inflation target at 1.5%. Under this accelerated schedule, Solana will reach its terminal rate in approximately 2.8 years instead of the previous 5.7 years, reducing new SOL entering circulation by an estimated 18.9 million over the next six years.
The proposal offers reduced token dilution for SOL holders but comes with lower staking rewards for validators and delegators.
Opposition From Major Staking Entities
Several prominent custodial stakers opposed the measure. Figment voted against SGP-0002 with 17.1 million SOL, while Everstake and P2P Validator also opposed it. Helius and Jupiter supported the proposal.
Custodial exchanges, which earn revenue from newly issued SOL, stand to lose income from faster disinflation. Mert Mumtaz, CEO of Helius and co-author of the proposals, dismissed these concerns as mathematically unsound, arguing that price appreciation from slower supply growth would exceed the lost yield.
Solana Company, a Nasdaq-listed treasury company, stated opposition to both supply proposals, citing concerns that reopening the inflation schedule introduces uncertainty for institutional multi-year financial models.
Related Governance Outcomes
SGP-0002 was part of Solana's first binding governance process. The Solana Constitution (SGP-0001) passed with 85.97% support. However, SGP-0003, a separate fee change proposal under SIMD-0553, failed with 53.90% support. That rejected measure would have generated SOL burns of 7,500 to 9,000 SOL daily, compared to the current approximately 650 SOL per day.
Both rejected supply proposals may be resubmitted without any cooling-off period, though supporters would need to address objections from custodians who have publicly opposed the changes.
