Author: Gu Yu
Solana is undergoing a landmark governance experiment.
On August 23, Solana launched its first-ever on-chain governance vote, with proposals SGP-0001, SGP-0002, and SGP-0003 entering the voting phase simultaneously, addressing the governance framework, SOL inflation mechanism, and transaction fee structure.
This not only signifies that Solana is beginning to delegate key decisions to validators and stakers, but also means that network upgrades, previously coordinated primarily by core developers and ecosystem institutions, are now entering a phase of open negotiation.
At approximately 11:00 PM tonight, voting for these three governance proposals officially concluded. Both SGP-0001 and SGP-0002 met the minimum voting threshold of one-third (the proportion of all eligible SOL stakers who voted) and the minimum approval threshold of two-thirds (the proportion of yes votes among all votes cast), and will now proceed to implementation.
However, SGP-0003, which pertains to the restructuring of network fees, did not pass, with support at 54.3%, falling short of the 66.6% minimum threshold. Additionally, the list of opposing votes includes a number of prominent projects such as Jupiter, Forward Industries, Anagram Staking, and Solana Company.
What do SGP-0001 and SGP-0002 mean for the Solana ecosystem? Why did SGP-0003 face significant controversy on social media and fail to pass?
SGP-0001: Establish the first formal governance framework
Solana previously did not have a clear, standardized on-chain governance process similar to Ethereum's. Traditional SIMDs primarily addressed “how to implement technically,” while the newly introduced SGP seeks to answer a different question—whether Solana should move in this direction.
SGP-0001 The Solana Constitution is the institutional foundation of this governance mechanism.
Under this framework, any proposal that receives at least 15% active stake support can proceed to an on-chain vote; voting is weighted by the amount of SOL staked, and votes are defaultingly cast by validators, but stakers can override validator votes using their own staking accounts. For a proposal to pass, at least one-third of the network’s total stake must participate, and at least two-thirds of the participating stake must vote in favor.
The significance of SGP-0001 lies not in altering Solana's performance or token economics, but in establishing a formal process to address future disputes.
SGP-0002: End the inflation decline cycle three years early
If SGP-0001 is about institutional development, then SGP-0002 and SGP-0003 directly address SOL's monetary economic model.
SGP-0002 "Double Disinflation" proposes increasing the annual rate at which Solana's inflation decreases from 15% to 30%, without altering the final inflation floor of 1.5%.
The difference lies in the time it takes to reach this endpoint.
According to the proposal, Solana would have originally taken approximately 5.7 years to gradually reach a 1.5% terminal inflation rate; the new proposal shortens this period to about 2.8 years,预计未来六年累计减少约 1890 万枚 SOL 的新增发行。
Supporters argue that this effectively accelerates SOL’s transition from an early-stage network model characterized by high inflation and high staking subsidies to a mature asset model. Forward Industries, the company behind the SOL treasury, believes that reducing new issuance can alleviate selling pressure from staking rewards and lessen dilution for long-term holders; the company estimates that 18.9 million SOL, at their then-current price, represents approximately $1.795 billion in potential issuance reduction.
But the opposition is equally direct. For validators, inflation rewards are a crucial source of income. The new proposal does not create new network revenue out of thin air; instead, it reduces future issuance, meaning validators and stakers will receive lower SOL rewards.
This is also a continuation of Solana’s response to the 2025 SIMD-0228 controversy. Previously, similar inflation reforms, despite receiving over 60% support, failed because they did not meet the supermajority threshold.
SGP-0003: A Proposal That Truly Changes the Solana Economic Model
Compared to SGP-0002, SGP-0003 is more controversial because it changes not only the SOL supply but also the entire network’s pricing mechanism for “block space.”
Solana's current base transaction fee is charged as a fixed fee based on the number of signatures. SGP-0003 proposes splitting it into two components:
A fixed base fee of 2,500 Lamports, paid entirely to the block producer;
Another portion is the Resource Fee, calculated based on the amount of resources requested by the exchange, and this fee will be 100% burned.
The core idea is very simple: those who consume more network resources pay more fees.
Currently, Solana burns approximately 648 SOL per day through base fees, but supporters of SGP-0003 believe the new mechanism could increase this number to thousands, with some estimates suggesting a range of 7,500–9,000 SOL per day, potentially increasing daily burns by about tenfold.
For SOL holders, this appears almost like a natural bullish development: reducing new issuance while increasing network burns will significantly slow the rate of SOL supply growth.
But the problem lies precisely here—the fees don’t materialize out of thin air. The new fees are ultimately borne by traders, applications, and on-chain markets.
Mostly Data simulated various types of applications and found that simple transfers are only minimally affected, but complex applications such as account creation, CLOB market making, and on-chain routing will face significantly higher costs. For trading protocols like Jupiter, Titan, and DFlow, the average fee per transaction could increase by approximately 0.000068, 0.00010, and 0.00012 SOL, respectively.
As a result, a rare strategic dispute emerged within Solana.
Biggest controversy: Is this "resource pricing" or a tax on applications?
Supporters of SGP-0003 argue that Solana's current fee model significantly underestimates the network resources consumed by complex transactions.
The proposer and developer of SGP-0003, Cavey, has even publicly acknowledged that this is a "biased proposal."
His goal is not to keep Solana as a completely neutral general-purpose computing platform, but rather to make Solana a blockchain more focused on financial markets. For financial applications, fast confirmation, stable execution, censorship resistance, and predictable resource pricing are more important than "everything must be cheap enough for any application."
Solana co-founder Anatoly Yakovenko also supports this direction. He believes that the current fixed signature fee for transactions results in nearly identical base costs for transactions of vastly different sizes. A transaction consuming only 5,000 CU faces the same pricing as a large transaction consuming 1.4 million CU under a fixed fee model, which is unreasonable; therefore, re-pricing based on CU addresses a real existing issue.
However, application developers do not accept this explanation.
Eugene Chen, CEO of Ellipsis Labs, is one of the strongest critics. He believes that SGP-0003 is essentially a highly subjective policy disguised as a neutral resource pricing mechanism.
In his view, if an application platform’s core economic parameters can suddenly change due to governance voting, it becomes difficult for developers to build long-term businesses on top of it.
He even bluntly stated that SGP-0003 is the middle finger to every microstructure-sensitive application on Solana, because it sends a signal to developers that today’s acceptable cost model could be completely rewritten by a single governance vote tomorrow.
Manifest also clearly opposes this. The project’s spending targets Solana’s truly scarce resource—priority ordering within blocks—which is already priced through priority fees. In contrast, the abundant available block space is not truly scarce but would be subject to additional fees under SGP-0003.
Manifest further warns that excessively high resource costs may have the opposite effect: developers may be forced to reduce on-chain security checks to lower CU costs, thereby increasing security risks.
On-chain voting records show that Jupiter, Drift, Forward Industries, and Anagram Staking voted against Proposal 0003; major stakers such as Figment, Staking Facilities, Kiln, and P2P.org clearly expressed support, while Everstake abstained directly.
Conclusion
From technological advancements to market performance, Solana is in a clear phase of expansion.
In July, Solana increased the single-block computational limit from 60 million CU to 100 million CU, further unlocking space for higher on-chain transaction density; in August, the mainnet slot time was further reduced to 350ms, with plans to move toward 200ms. Firedancer is now live on mainnet, and next-generation consensus upgrades such as Alpenglow are also in progress. Meanwhile, financial applications including RWA, stablecoin payments, and tokenized stocks continue to expand, as Solana seeks to convert its high-performance advantages into larger-scale real-world economic activity.
The price of SOL also experienced a rapid rebound, rising from around $75 in August to above $110. Driven by technical upgrades, ecosystem expansion, and market expectations, Solana appears to be regaining market pricing for its next phase of growth.
But this first governance vote revealed another side.
Faster networks and greater capacity do not mean all participants will benefit. The passage of SGP-0002 indicates that the market has reached a certain consensus on reducing SOL’s long-term inflation; however, the failure of SGP-0003 to gain sufficient support shows that application developers remain highly cautious about sudden cost increases and the redefinition of economic rules.
This is also Solana’s most pressing current contradiction: it is striving to become a more powerful financial infrastructure, yet has not yet fully resolved how such infrastructure should be priced.
In the past, Solana’s competitive logic was relatively simple—lower fees, higher performance, greater throughput; but as more transactions, market-making, payments, and RWA business began to run on-chain, “low cost” is no longer just about user experience—it now directly impacts the business models of applications.
Therefore, the first round of governance did not leave behind the outcome of any single proposal, but rather a clearer dividing line: Solana can no longer rely solely on its technical roadmap to drive network growth; in the future, it must find a new balance between developer incentives, validator rewards, SOL holder value, and the network’s long-term sustainability.
When a public blockchain transitions from “pursuing performance” to “supporting an economy,” governance ceases to be a secondary mechanism and becomes a core competitive advantage. Solana’s first round of governance may merely be the beginning of this contest.