Two governance proposals under consideration on Solana could reshape the network's issuance and burn mechanics and reduce SOL supply by as much as $1.5 billion, according to an analysis by crypto asset manager 21Shares. Together, SIMD-550 and SIMD-553 could cut issuance by $1.4 billion to $1.5 billion over six years, the firm estimates.

SIMD-550 would double Solana's annual disinflation from 15% to 30%, while SIMD-553 would add burn fees tied to requested compute units that could lift daily SOL burns from 600-800 to 7,500-9,000 at current activity levels.

SIMD-550 Would Double Annual Disinflation

SIMD-550 was submitted by Helius and entered a vote on Aug. 23, giving Solana validators a direct say over the network's monetary policy. The proposal would move Solana toward its 1.5% terminal inflation rate by the first half of 2029, with staking yield falling to about 4.34% in year one, 3% in year two and 2.25% in year three. Solana's issuance is already programmed to step down toward that 1.5% floor; SIMD-550 would accelerate the descent by doubling the annual rate of decline.

For context, Solana's staking yield stood near 5.25% on Aug. 24. Protocol inflation supplied about 3.78% of that return, while transaction fees, tips and MEV supplied the remainder. That means most of today's staking return comes from protocol inflation — the component SIMD-550 would directly shrink.

SIMD-553 Would Add Compute-Unit Burn Fees

The second change, SIMD-553, came from Solana research and development firm Temporal. Development teams approved and merged it on July 20, adding a burn fee tied to requested compute units. The approach has precedent on other major networks: Ethereum's EIP-1559 upgrade introduced base-fee burning in 2021, permanently removing a portion of transaction fees from circulation.

At current network activity, 21Shares estimates daily SOL burns could rise from 600-800 SOL to 7,500-9,000 SOL — roughly $712,500 to $855,000 per day. Even so, burns at that level would not fully offset daily inflation, which the firm puts at roughly $4.5 million. Even at the upper estimate, burns would cover only about one-sixth to one-fifth of new issuance, leaving Solana in net inflation — just at a slower pace.

Taken together, the two proposals could reduce SOL issuance by $1.4 billion to $1.5 billion across six years, 21Shares estimates. SIMD-553 is not yet final in every respect: its validator voting-fee design remains unresolved, and validator costs could increase modestly or reach about 21 times current levels, depending on how that question is settled.

Lower Yield Reshapes Validator Economics

Lower yields would also reshape validator economics. 21Shares estimates that two of Solana's 738 validators could become unprofitable in year one, with that number potentially reaching 30 by year three under SIMD-550 projections.

The firm places Solana's staking ratio at 67.93%, compared with 34.14% for Ethereum — meaning any shift in staking economics would reach most of SOL's circulating supply. Lower staking returns could redirect capital toward DeFi and other on-chain uses, 21Shares said, although MEV and tips would need to rise by about 55% to 95% to replace the lost staking revenue.

The final economic impact, the firm added, depends on the outcome of the SIMD-550 vote and on how SIMD-553's validator fee design is resolved.