Solana is advancing two governance proposals, SIMD-550 and SIMD-553, that could materially alter SOL supply dynamics over the coming years.

According to data from 21Shares, the changes could reduce Solana issuance by between $1.4 billion and $1.5 billion over six years. They would also significantly increase daily SOL burns while reducing staking yield for validators and holders, making the proposals especially relevant for participants who rely on staking income or track network tokenomics.

How SIMD-550 and SIMD-553 Would Affect SOL Supply

SIMD-550, proposed by Solana infrastructure firm Helius, would double the network’s annual disinflation rate from -15% to -30%. That would accelerate Solana’s path to its 1.5% terminal inflation rate, bringing the target forward from around 2032 to the first half of 2029.

The faster disinflation curve would also pressure nominal staking yield. 21Shares estimates that yield could fall to about 4.34% in year one and to roughly 2.25% by year three.

SIMD-553, submitted by Solana research firm Temporal, was approved and merged on July 20. The proposal introduces a burn fee tied to compute units used in financial transactions on the network.

Under that structure, daily SOL burns could rise from the current range of roughly 600 to 800 SOL to between 7,500 and 9,000 SOL. Based on 21Shares figures as of August 24, that would equal about $712,500 to $855,000 in daily value.

Together, the two proposals are projected to reduce issuance by $1.4 billion to $1.5 billion over six years. However, the final outcome still depends on the SIMD-550 vote and on the validator fee design under SIMD-553, so the changes are not yet fully locked in.

Solana Proposals Could Sharply Increase SOL Burns and Cut Issuance by $1.4B-$1.5B Over Six Years According to 21Shares, Solana is advancing two governance proposals, SIMD-550 and SIMD-553. SIMD-550 would double the annual disinflation rate from -15% to -30%, moving Solana’s path… pic.twitter.com/rQ8jqgBRNX — Wu Blockchain (@WuBlockchain) August 26, 2026

What the Yield Compression Could Mean for Holders

Solana’s staking yield is currently near 5.25%, supported by protocol inflation, transaction fees and MEV revenue. Protocol inflation accounts for the largest portion, at roughly 3.78%, according to 21Shares.

If yields decline from about 6% to near 3% within two years, staking income per SOL would be reduced by roughly half.

Validator economics may also be affected. SIMD-553’s fee design for validators has not yet been finalized, and that uncertainty could influence profitability. Based on current projections, two of Solana’s 738 validators would be unprofitable in year one. That number could increase to 30 validators by year three if fees rise as expected.

Solana’s staking ratio stands at 67.93%, nearly double Ethereum’s 34.14%, according to 21Shares. Lower staking yield is intended in part to encourage capital to move out of staking and into DeFi activity across the network, which helps explain why token supply changes on Solana are being watched closely beyond just validator returns.

There is also some historical context from other blockchain upgrades. Ethereum’s EIP-1559 burn mechanism gained 37% in the month after its August 2021 launch, while Cosmos’s Proposal 848 rose 25% in the month following its November 2023 passage.

21Shares noted that both moves also coincided with broader market strength, meaning the upgrades were not the only factor behind those gains.