Solana Validators Approve Plan to Double SOL Disinflation Rate

Solana validators approved SGP-0002, a proposal that doubles the network's annual SOL disinflation rate. The measure passed with 67% support, while turnout reached only 60.7% of eligible stake. The decision will directly affect future token issuance and staking rewards.

The Vote Passed by a Thin Margin

Voting closed on August 28 and marked Solana's first binding governance round. SGP-0002 received 67% support, 25.16% voted against, and 7.84% abstained. Alongside disinflation, validators also approved a new Solana Constitution that formalizes procedures for future votes. Turnout of 60.7% counts as high by crypto governance standards, since similar votes on other networks rarely draw more than a third of token holders.

A separate proposal on resource and inclusion fees failed. Three items were on the ballot at once:

• SGP-0002 doubling SOL disinflation
• adoption of the Solana Constitution
• the rejected resource and inclusion fee proposal

Previously, changes like this were mostly decided by Solana's core developer team without a formal stakeholder vote. SGP-0002 shifts that process and turns future tokenomics changes into a matter of open network consensus.

Before SGP-0002, changes of this scale were largely settled by Solana Labs' technical committee and the Solana Foundation, based on technical SIMD proposals. This is the first formal stakeholder vote, and similar votes on transaction fees and consensus parameters may follow the same model soon.

Solana originally launched with roughly 8% annual inflation, which fell by 15% each year toward a 1.5% target floor. SGP-0002 doubled the pace of that decline, so the network will reach the final target markedly faster than the original 2020 tokenomics design intended.

Kraken Almost Sank the Proposal

At 12:33 UTC, Kraken unexpectedly voted against the measure. That briefly pushed support below the threshold needed for approval. For a few hours, it wasn't clear whether SGP-0002 would gather enough votes.

By the time voting closed, the exchange's position had reversed completely: more than 90% of the roughly 8.9 million SOL under Kraken's control ended up backing the proposal. Kraken did not publicly explain the reversal.

Voting power in these rounds is assigned to validators in proportion to staked SOL, including client tokens held by exchanges in custody. That's why a single large exchange like Kraken can single-handedly swing the outcome of a network-wide vote.

The largest single voter, Figment, with 17.1 million SOL staked, voted entirely against SGP-0002. Helius and Jupiter, by contrast, backed the proposal almost unanimously, and their support largely offset Figment's opposition.

Figment did not publicly disclose the reasoning behind its stance, but custody providers like it tend to be more cautious about lower rewards, since staking payouts make up a large share of their revenue from client assets.

What Changes for SOL Issuance

SGP-0002 raises the annual disinflation rate from 15% to 30%, while the long-term inflation target stays unchanged at 1.5%. Under the new schedule, the network will reach that terminal rate in about 2.8 years instead of the previous 5.7 years.

According to Solana Compass, roughly 18.9 million fewer SOL will be issued over the next six years compared to the old schedule. Lower issuance reduces dilution for long-term token holders.

By the community's early estimates, slower supply growth could trim nominal staking yields by a few tenths of a percentage point over the coming year. For large validators, that means revisiting fee structures; for smaller delegators, it may mean looking at alternative pools.

The decision has a downside too. Reduced issuance directly cuts staking income for validators and delegators, so some network participants may rethink their strategy in the coming months.

Similar debates over the balance between inflation and network security are playing out across other major proof-of-stake chains, where staking rewards are just as tied to coin issuance rates. Solana's decision stands out as one of the most notable cases where a parameter change was approved by the community itself rather than by developers.

ETF Inflows Followed the Vote

The vote followed a run of strong network numbers: SOL gained roughly 40% over the past month, and daily transaction counts hit a record 4.2 billion. That added extra fuel to institutional interest in new SOL products.

Around the same time as the vote, Bitwise's Solana ETF crossed $1 billion in assets under management. According to Bloomberg ETF analyst Eric Balchunas, it became the first Solana ETF to reach that milestone. Cumulative net inflows into all US Solana ETFs reached roughly $1.7 billion.

On the same day, Bitcoin traded near $77,600, while Ethereum was priced at about $2,440. SOL gained roughly 1.6% over the day and traded just above $103.

The coming weeks will show whether lower rewards push some validators to change strategy. For now, the market has taken the decision in stride, and investor attention stays fixed on the pace of Solana ETF inflows. Analysts expect the community's next vote to address transaction fee parameters.