Solana (SOL) has climbed more than 8% in the past 24 hours and roughly 44% since the start of August, its strongest monthly performance since 2024, returning the token above $105 for the first time since January.

The rally coincides with the close of the Solana network's first-ever binding governance vote, which will decide whether to double the network's disinflation rate and dramatically increase the amount of SOL burned each day. The vote also marks a structural shift for the network itself: until now, Solana's economic parameters have been set through off-chain coordination among core developers, while this mechanism makes token supply policy something stake-weighted, on-chain voting can change.

Nasdaq-listed Solana Company backs the new governance framework itself but is voting against both economic changes, citing timing concerns rather than disagreement with the goals.

A supply squeeze priced in

The gains are no coincidence, as traders appear to have spent the week pricing in a supply squeeze ahead of the official outcome. Voting concludes around 15:30 UTC today, when epoch 1023 ends—an epoch being roughly a two-to-three-day stretch of network activity that Solana uses as its internal clock.

The vote bundles three proposals under Solana Governance Proposals, or SGPs, a brand-new on-chain system that lets validators and the people who delegate SOL to them cast binding, stake-weighted votes for the first time ever. One ratifies a Solana Constitution formalizing how that voting works going forward. The other two—SIMD-550 and SIMD-553—are the ones driving the price conversation.

SIMD-550: printing less SOL

SIMD-550, filed by engineers at Solana infrastructure firm Helius, would double Solana's disinflation rate—the yearly pace at which new-token issuance shrinks—from 15% to 30%. Solana's inflation already declines each year on its way to a fixed 1.5% floor. SIMD-550 would simply get there faster, hitting that floor by 2029 instead of 2032, which works out to roughly 18.9 million fewer SOL created over the next six years.

That comes at a cost, however. Inflation is what pays stakers—people who lock up SOL to help secure the network—their yield. Per a 21Shares analysis, cutting issuance that hard would see staking yield fall from around 5.25% today to about 2.25% within three years—something like a Bitcoin halving for staking. A few smaller validators could become unprofitable in the process, so the change would not be good news for everyone.

SIMD-553: burning a lot more SOL

SIMD-553, from Solana R&D firm Temporal, tackles supply from the other direction: burning, meaning SOL gets sent to an address nobody can ever spend from, permanently taking it out of circulation. It splits Solana's transaction fee into two pieces—a base "inclusion fee" that still pays the validator, and a new "resource fee," tied to how much computing power a transaction consumes, that gets destroyed outright. The design deliberately echoes Ethereum's EIP-1559 upgrade, which since 2021 has burned that network's base transaction fee and made Ethereum's net supply responsive to how busy the chain is.

That single change would take Solana's daily burn from about 650 SOL, worth roughly $48,000, to as much as 9,000 SOL, worth around $668,000—a 12-to-14x jump depending on network activity. The proposal already cleared code review from Solana's two client teams, Anza and Firedancer, on July 20. Today's vote decides whether it turns on, not whether it is ready.

Institutional objection on timing

Nasdaq-listed treasury firm Solana Company, which trades as HSDT, is backing the constitution but voting against both tokenomics changes. Management says the objection is about timing, not the goal—predictable yield matters more to institutional stakers right now than a faster cut does.

The Solana developers announced the vote on X:

Solana Validator Governance Voting is now live for SGP 1, SGP 2, and SGP 3. - SGP-0001: The Solana Constitution - SGP-0002: Double Disinflation - SGP-0003: Resource and Inclusion Fee Voting lasts until the end of epoch 1023 (Thursday at approximately 15:30 UTC). See the… — Solana Developers (@solana_devs) August 23, 2026

https://x.com/solana_devs/status/2091525961925698024

Both proposals need a two-thirds supermajority of participating stake and are voted on independently, so a rejection of one would not sink the other. Because stake-weighted voting concentrates influence among the largest validators and their delegators, the outcome will also be an early test of how concentrated or distributed Solana's governance power actually is under the new system.

The pending vote has not slowed the chart. SOL's 14-day RSI, a momentum gauge where readings above 70 typically flag an asset as overbought, is sitting near 84.5. Results from today's vote are expected within hours of epoch 1023 closing, and the on-chain tallies mean the outcome should be verifiable directly on the blockchain as soon as the epoch closes.