Solana Validators Approve Token Disinflation Plan

Solana validators have approved a proposal to accelerate the network’s disinflation schedule, effectively reducing the amount of new SOL expected to enter circulation in the coming years. Finalized governance results show that the proposal received 67% support, while 25.16% voted against and 7.84% abstained. Overall participation reached 60.7% of eligible stake.

Known as SGP-0002, or Double Disinflation, the proposal raises Solana’s annual disinflation rate from 15% to 30%, while keeping the network’s long-term inflation target unchanged at 1.5%.

Solana to reach 1.5% inflation target faster

Under the revised schedule, Solana is expected to reach its terminal inflation rate of 1.5% in around 2.8 years, compared with approximately 5.7 years under the previous model, according to Solana Compass. The change is expected to result in roughly 18.9 million fewer SOL being issued over the next six years.

That would reduce dilution for existing SOL holders, although it would also lower staking rewards for validators and delegators. The vote formed part of Solana’s first binding governance process, which also approved a proposed Solana Constitution while rejecting a separate measure concerning resource and inclusion fees.

Major validators split on proposal

Some of Solana’s largest governance participants took opposing positions on SGP-0002. Figment, the largest voter shown in finalized governance data with 17.1 million SOL staked, voted entirely against the proposal. Helius and Jupiter, meanwhile, strongly supported it.

Kraken also changed its position during the voting period. The US-based exchange initially voted against SGP-0002 at 12:33 UTC, temporarily pushing support below the required threshold. By the end of voting, however, more than 90% of Kraken’s roughly 8.9 million SOL voting stake supported the proposal.

Solana ETF assets continue to grow

The governance decision comes as US-listed Solana investment products continue attracting capital despite weaker SOL performance earlier in the year. Bitwise’s Solana ETF recently surpassed $1 billion in assets, becoming the first Solana ETF to reach that milestone, according to Bloomberg ETF analyst Eric Balchunas. Balchunas said US Solana ETFs have accumulated roughly $1.7 billion in cumulative net inflows, with little sustained outflow since their launch.

Sources:

https://solanacompass.com/news/kraken-votes-no-on-both-supply-proposals-pushing-sgp-0002-below-the-threshold

https://governance.solana.com/proposal/7QJD8MzheHWJLHS39NkoAbFCGFKg5d9QbVviRqD4YExP

https://cointelegraph.com/news/solana-validators-approve-proposal-to-accelerate-sol-disinflation

https://x.com/EricBalchunas/status/2093349072069656796