SOL has risen over 8% in the past 24 hours, with a cumulative gain of approximately 44% since August, pushing its price back above $105. This marks one of the strongest monthly performances for the token since 2024. Concurrent with this rally, Solana’s first binding governance vote is entering its final stages, and the market is repricing based on anticipated changes in token supply.
Voting ends today
This vote will close at the end of epoch 1023, approximately at 15:30 UTC. Solana is launching its new on-chain governance system for the first time, enabling validators and their delegators to cast binding votes weighted by their stake.
- SGP-0001: Confirm the Solana Charter
- SGP-0002: Accelerate the pace of inflation decline
- SGP-0003: Adjust trading fees and increase token burn
Among these, the last two economic proposals are the main factors influencing market expectations.
The reduction proposal targets the 2029 goal.
SIMD-550, proposed by engineers at infrastructure company Helius, aims to double Solana's annual deflation rate from 15% to 30%. Under this proposal, SOL's inflation rate would reach its long-term floor of 1.5% earlier, moving from 2032 to 2029.
According to the calculations in the article, this means that approximately 18.9 million new SOL tokens will be issued over the next six years. The market is thus betting on reduced supply. However, the decrease in new issuance will also lower staking yields. The report cites estimates suggesting that annual staking yields could drop from the current level of about 5.25% to around 2.25% within three years, putting pressure on the profitability of some smaller validators.
The burn proposal could increase the daily burn amount to 9,000 tokens.
Another proposal, SIMD-553, proposed by Solana’s development company Temporal, aims to increase SOL burns through a restructuring of transaction fees. The plan splits transaction fees into two parts: one portion continues to be paid to validators, while the other is charged based on the computational resources consumed by the transaction and burned directly.
If the proposal passes, Solana’s daily burn rate could increase from the current approximately 650 SOL to as high as 9,000 SOL—an increase of about 12 to 14 times—depending on network activity levels. The report notes that this change has already passed code review by the Anza and Firedancer client teams; the current vote is on whether to enable it, not whether it is technically feasible.
Publicly traded company Solana Company opposes two economic adjustments.
Nasdaq-listed crypto treasury company Solana Company (ticker: HSDT) supports the governance charter itself but opposes the two aforementioned token economic adjustments. Management stated that the opposition is primarily due to timing, not the direction of the goals.
The company believes that, for institutional stakers, the predictability of yields is currently more important than faster issuance compression. The two economic proposals will be voted on separately and each requires support from more than two-thirds of the staking weight; therefore, the failure of one proposal will not affect the outcome of the other.
As of press time, the market has clearly priced in expectations of reduced supply. The report notes that SOL’s 14-day RSI has approached 84.5, indicating strong short-term momentum. The voting results are expected to be released within hours after the end of this epoch.