Solana backs doubling of disinflation, rejects fee proposal

Solana has completed its first on-chain governance voting round. Two of the three proposals have been adopted: the so-called Solana Constitution and a plan to double the annual disinflation rate of SOL. A third proposal on transaction fees failed to reach the required majority.

Solana is available at OKX and Bybit.

In brief:

• SGP-0001 (Solana Constitution) and SGP-0002 (doubling disinflation) have been adopted.
• SGP-0003 on restructuring transaction fees fails to reach the two-thirds threshold.
• Under SGP-0002, approximately 18.9 million fewer SOL will enter circulation over six years.

Two proposals adopted, one rejected

SGP-0001, the Solana Constitution, received the broadest support with 85.97% of votes in favour. This document sets out how decision-making works at network level and activates Solana’s on-chain governance structure. The quorum was reached for all three proposals.

SGP-0002, the proposal to double the disinflation rate, was adopted with 67.00% support. That is exactly enough, as the proposal requires a two-thirds majority. SGP-0003, with 53.90% support, remains well below that threshold and is rejected.

What does the doubled disinflation mean for SOL?

SGP-0002 doubles SOL’s annual disinflation rate from 15% to 30%. As a result, inflation moves faster towards the targeted end level of 1.5% per year. Without this decision, that end level would be reached in roughly 5.7 years; with the doubling, it will take only 2.8 years.

In concrete terms, this means that approximately 18.9 million fewer SOL will enter circulation over a six-year period. The proposal thus significantly reduces the issuance of new tokens. At the time of writing, SOL is trading at $103, down 2.9% in the past 24 hours.

Rejected proposal wanted to restructure transaction fees

SGP-0003 proposed splitting the current fixed base transaction fee into two parts: a fixed inclusion fee and a variable fee based on the computational capacity requested. That second part would be fully burned, further reducing the supply of SOL.

Although more than half of participants voted in favour, the proposal did not reach the required two-thirds threshold. The network has therefore for now chosen to keep the current fee structure. Solana is also attracting attention outside its own community: Charles Schwab recently added SOL to its crypto platform.