Solana validators approved on Friday (28) the SGP-0002, a proposal that doubles from 15% to 30% the annual rate of SOL inflation reduction. The measure received 67% of votes, just above the required 66.67%, after a contest decided in the final hours and a change of position by Kraken.
The new trajectory could avoid the issuance of approximately 18.9 million SOL over the next six years, a volume the proposal's authors valued at approximately US$ 1.51 billion based on the price used in the calculations presented in June.
The vote ended with 25.16% of votes against and 7.84% abstentions. Turnout reached 60.7% of eligible stake, above the minimum quorum required to validate the decision.
Kraken changes vote at the end of the contest
Approval was threatened in the final hours. A Kraken-linked validator, accounting for about 2% of the voting weight, had positioned itself against SGP-0002, bringing support for the proposal below the required supermajority.
Near the close, Kraken reversed its vote from against to in favor. Galaxy also redistributed a significant portion of its votes, previously concentrated in abstentions, to support the proposal. The changes helped raise the final result to 67%, just about 0.33 pp above the required limit.
The move occurred during a mobilization by supporters of the change. Mert Mumtaz, CEO of Helius and one of the proposal's main advocates, said after the closing that he made hundreds of calls to validators in the final hours to seek favorable votes.
There is, however, insufficient basis in the official documentation to say that Kraken changed its position specifically due to "community pressure," as the base text suggested. The confirmed fact is that the vote was changed in the final hours of the process.
SOL inflation to reach the 1.5% floor faster
SGP-0002 supports the implementation of SIMD-0550, which keeps Solana's terminal inflation at 1.5% per year, but accelerates the path to that level. The disinflation rate — the speed at which annual inflation decreases — goes from 15% to 30%.
In the calculations presented by the authors, the network would reach terminal inflation in approximately 2.8 years, around the first half of 2029. Under the previous trajectory, the same level would be reached in about 5.7 years, in the first half of 2032.
The accumulated difference would be approximately 18.89 million SOL over six years. The total projected supply at the end of that period would fall from about 727.43 million SOL under the previous schedule to 708.54 million SOL with the new trajectory, an approximate reduction of 2.6%.
The estimate of US$ 1.51 billion represents the value of those avoided emissions using the SOL price adopted by the authors when the analysis was published. The number does not correspond to an immediate withdrawal of US$ 1.51 billion from the market nor to a burn of existing tokens.
Staking will also have a lower return
The faster reduction of inflation decreases the amount of new SOL distributed as staking rewards. In the intermediate scenario used by the authors, with 68% of the supply staked, the projected nominal return falls to 4.34% after one year, 3% after two years and 2.25% after three years.
Under the previous schedule, the same calculations pointed to returns of 4.93%, 4.17% and 3.52%, respectively. The projections do not include additional revenue such as MEV, fees, or block rewards.
The proposal itself acknowledges that the change could affect validator economics. The authors' model calculates that, among 738 validators analyzed, two would move from profitable or break-even to loss-making in the first year, 13 in the second and 30 in the third, compared with the initial situation.
Change does not take effect immediately
The approval of SGP-0002 does not automatically change Solana's code. The proposal depends on SIMD-0550 and the activation of a feature gate in the network's clients, following the normal development and coordination process among validators.
The planning used by the authors considers a period of approximately 4.5 months before activation, including to accommodate the governance process and the Alpenglow consensus upgrade.
A second economic proposal submitted in the same round, SGP-0003, which aimed to reformulate certain network fees and increase the amount of SOL burned, did not receive the necessary support.
