Solana validators are close to advancing a governance proposal that would raise daily SOL burns from about 650 SOL to as much as 9,000 SOL while doubling the network's disinflation rate. The plan, SGP-0003, has drawn support from 73 validators, including Helius and Jupiter. It still needs more backing before an Aug. 18 deadline.
Solana validators are close to advancing a governance proposal that would sharply increase the amount of SOL burned each day while reducing the rate at which new tokens enter circulation.
If implemented, the proposal would therefore limit the network token's inflation rate, thereby limiting supply and, in theory, could lead to an increase in the price of Solana tokens if demand remains steady or increases.
Burn increase tied to new fee model
The proposal, SGP-0003, combines two previously introduced Solana Improvement Documents into a single governance package aimed at tightening SOL's supply. One document would introduce resource-based transaction fees, increasing daily SOL burns from about 650 SOL (roughly $48,000) to between 7,500 and 9,000 SOL (up to about $668,000), depending on network activity. A companion document would also double Solana's annual disinflation rate to 30%, bringing the network's 1.5% inflation floor forward from 2032 to 2029.
A token burn permanently removes cryptocurrency from circulation by sending it to an unusable wallet address. By pairing larger burns with lower issuance, the proposal would reduce the growth of SOL's circulating supply.
Support nears the required threshold
The proposal is in Solana's support phase and must secure backing from validators. As of Tuesday morning, it had support from 63 million SOL, or just over 14.4% of the network's staked supply, leaving about 3 million SOL needed to reach the threshold of 65.16 million SOL before the Aug. 18 deadline.
According to the Solana Validator Governance dashboard, the proposal has 73 supporters, including Helius, Jupiter, Staking Facilities, Drift, OtterSec, and Solana Compass.
The higher burn rate alone would not make SOL deflationary. Solana currently issues about 60,000 SOL per day, and the companion issuance proposal is designed to reduce new supply while the fee changes increase the amount of SOL permanently removed from circulation. If the proposal reaches the required support threshold, it will advance to the discussion phase before a formal validator vote.
SOL still far off its record high
Solana, which trades as SOL, is currently changing hands for around $74 at a $43 billion market capitalization.
The token is up slightly on the day but still a considerable way off from its all-time high of $293 that it reached over a year ago.
Traders on Myriad, a prediction market developed by Decrypt's parent company Dastan, remain bearish on the token as of yet, placing 70% odds that SOL drops to $40 before recovering to $160.
Source: Decrypt
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