Solana narrowly approved SGP-0002, doubling its annual disinflation rate from 15% to 30% and bringing its 1.5% terminal inflation rate forward to 2029 from 2032. The proposal passed with 67% support, barely clearing the 66.67% threshold after Kraken's largest validator flipped ~8.1M SOL from against to for in the final hours.
The Case For: As we covered yesterday, supporters argue Solana is mature enough that it no longer needs to issue as much SOL to maintain security. Lower issuance reduces dilution, strengthens SOL's "money-ness," and lowers staking yields, potentially making DeFi more competitive for SOL holders.
The Case Against: Critics worry lower rewards could squeeze smaller validators, push stake toward larger operators, and ultimately increase centralization. There's also the simpler objection that reducing supply growth does not inherently create greater demand for SOL.
A Broader PoS Debate: Solana's vote reflects a wider question facing mature Proof-of-Stake networks like Ethereum: are they overpaying for economic security? Heavy issuance helps bootstrap young networks, but as the amount of capital securing them grows, both ecosystems are reconsidering how much dilution is actually necessary.
Burn Proposal Falls Short: Meanwhile, sister proposal SGP-0003 failed with just 53.9% support, short of the same 66.67% threshold. It would have replaced part of Solana's flat transaction fee with a resource-based fee that gets burned, potentially increasing daily burns from ~650 SOL to 7,500–9,000 SOL. For now, Solana is tightening supply growth through lower issuance, but not higher burns.
