Solana has closed out its first-ever binding on-chain governance vote, approving SGP-0002, a proposal that doubles the network's disinflation rate from 15% to 30% and brings the 1.5% issuance floor forward to 2029 instead of 2032.

The result came down to the wire: the proposal passed with 67.0% support against a 66.67% threshold, after cryptocurrency exchange Kraken opposed it throughout the count before flipping its stance at the last minute.

Validators also ratified SGP-0001, the Solana Constitution, with 86% support, but rejected SGP-0003, a "Resource and Inclusion Fee" that would have burned up to 14 times more SOL per day.

A first for on-chain governance

The Solana network will soon issue considerably less new SOL each year, after validators voted to double the token's disinflation rate. The outcome was welcomed by Solana investors, who expect it to be bullish for SOL's price going forward—though the process was not without drama.

The ballot was a stake-weighted vote run through the new Solana Governance Proposal system (SGPs), which allows validators and their delegators to vote on-chain for the first time. That marks a shift from Solana's earlier governance model, in which most consequential changes were decided off-chain among core developers and validators via SIMD proposals. The package bundled three proposals, and they did not all land the same way.

The most consequential was SGP-0002, the "Double Disinflation" proposal, which passed by a hair—67.0% in favor (176.29 million SOL) versus 66.19 million SOL against, on 1,326 votes, with a 60.7% quorum.

The proposal tracks SIMD-550, filed by engineers at infrastructure firm Helius. Now passed, it doubles Solana's disinflation rate—the yearly pace at which new-token issuance shrinks—from 15% to 30%.

Solana's inflation already declines incrementally each year on its way to a fixed 1.5% floor. SIMD-550 simply gets there faster, reaching that floor by 2029 instead of 2032—which works out to roughly 18.9 million fewer SOL created over the next six years. That 1.5% terminal rate is comparable to Ethereum's post-merge issuance profile, where new supply growth is similarly capped at a low fixed rate and net issuance has often run below it thanks to fee burning.

The practical effect is less SOL in circulation each year, which could prove bullish for the token long-term if rising demand coincides with the reduced supply.

There are trade-offs, however. New-token issuance is what pays stakers—the people and companies who lock up SOL to help secure the network—via staking yield. As 21Shares noted, cutting issuance would push staking yield down from around 5.25% today to roughly 2.25% within three years. How the network attracts stake at materially lower yields is now an open question for validators, delegators, and the institutional staking businesses built around them.

That is likely why some staking providers initially opposed the change: Kraken voted against the disinflation proposal through the count, while Galaxy initially abstained (effectively counting against) before switching its vote in the final hour.

Kraken, with 8.92 million SOL of voting power, nearly sank SGP-0002, voting against it until reversing at the last minute. "Custodians should be conduits, not voices," Kraken Co-CEO Arjun Sethi wrote in a reply to Helius CEO Mert Mumtaz.

Custodians should be conduits, not voices. — Arjun Sethi (@arjunsethi) August 28, 2026

Mumtaz, who lobbied hard for Kraken and others to back the proposal, welcomed the change of stance once Kraken moved. With 67.0% support against a 66.67% requirement, a few million SOL one way or the other was the difference between passage and failure. The episode also previewed a recurring tension in proof-of-stake governance: exchanges and custodians voting stakes they hold on behalf of clients, a debate that has flared on other chains as well.

The other Solana proposals

Beyond the disinflation debate, validators weighed two additional proposals that will shape the network's future.

SGP-0001, the Solana Constitution, was the straightforward one. It formalizes how the voting system works going forward and passed with 86.0% of participating stake in favor—193.65 million SOL for versus 4.63 million against, across 1,153 votes, with quorum met at 52.0% participation.

The other economic contest, SGP-0003, the "Resource and Inclusion Fee," failed. It reached just 53.9% in favor—142.84 million SOL for versus 50.15 million against, with a heavy 72.03 million SOL abstaining—well short of the two-thirds bar.

That proposal tracks SIMD-553, from R&D firm Temporal, and would have split Solana's transaction fee in two: a base "inclusion fee" that still pays validators, and a new "resource fee" tied to a transaction's compute usage that would be destroyed outright—an approach in the spirit of Ethereum's EIP-1559, which has burned a portion of Ethereum transaction fees since 2021.

The change would have lifted daily SOL burns from about 650 SOL (roughly $48,000) to as much as 9,000 SOL (around $668,000)—a 12-to-14x jump. It had already cleared code review from Solana's two client teams, Anza and Firedancer, on July 20; the vote was about activation, not readiness. Its failure means the proposal would need to clear a new vote before activation, though any future path depends on how stakeholders respond to the concerns raised this round.

Solana Company, the Nasdaq-listed treasury firm (HSDT), backed the constitution but voted against both economic changes, arguing the timing was wrong for institutional stakers seeking predictable yield. DeFi Development Corp voted the other way on all three proposals and bought 19,000 SOL for $1.86 million afterward.

Market reaction

SOL had spent the week pricing in a supply squeeze, up roughly 44% on the month heading into the vote. The chart turned once SGP-0003 failed. The Aug. 28 daily candle on Coinbase opened at $109.18, hit a high of $110.14, sold off to a low of $103.63, and closed at $105.00—a 3.83% drop from the open and about 5.4% off the recent swing high near $111.