Solana Governance Proposal SGP-0003 Would Raise Daily SOL Burns from $47,000 to $650,000

A pair of linked Solana governance proposals — SIMD-0550 and SIMD-0553 — would reshape the network's tokenomics by simultaneously reducing new SOL issuance and increasing the volume of SOL burned. Together, they aim to tighten circulating supply, though neither proposal alone would render SOL deflationary. The package, known as SGP-0003, requires an additional 40 million SOL in validator support within two weeks to reach a formal vote.

Resource-Based Transaction Fees

SIMD-0553 introduces a resource-based fee model that charges transactions according to the network resources they consume. Under the proposal, daily SOL burns would rise from approximately 650 SOL — about $47,000 at current prices — to a range of 7,500 to 9,000 SOL, or up to roughly $650,000 per day.

The concept of destroying a portion of transaction fees is not new among major Layer 1 networks. Ethereum's EIP-1559 upgrade, implemented in August 2021, began burning a base fee from every transaction and is widely credited with reshaping ETH supply dynamics. Solana's proposal goes further by tying burn volume directly to resource consumption rather than a fixed fee component.

However, even at the upper end of that projected range, the 9,000 SOL burned daily would still be offset by roughly 60,000 SOL in daily inflation. The fee overhaul by itself does not make SOL deflationary, which is why the two proposals are bundled: SIMD-0550 reduces issuance while SIMD-0553 increases what is destroyed.

Accelerated Disinflation Schedule

A companion measure, SIMD-0550, doubles Solana's annual disinflation rate to 30%. That change advances the network's 1.5% terminal inflation floor from 2032 to 2029 and removes approximately 18.9 million SOL of emissions over a six-year period — valued at roughly $1.36 billion at current prices.

Solana's inflation rate currently sits near 3.8%, down from its initial 8% under a schedule that reduces the rate by 15% each year.

Validator Signaling Progress

The proposals have garnered backing from 24.94 million SOL in stake, representing 5.8% of the 432.65 million SOL currently staked. That figure places support roughly 38% of the way toward the 15% signaling threshold a proposal must clear before proceeding to a formal vote.

Sixteen validators have signaled so far, accounting for approximately 2.3% of the total validator set. Infrastructure company Helius dominates the tally, contributing 16.03 million SOL — close to two-thirds of all support gathered. Validator Blueshift follows with 3.6 million SOL, and Temporal Emerald with 1.24 million SOL, after which the list trails off rapidly. The concentration of support in a single validator underscores how Solana's stake-weighted model gives large stakers outsized influence over governance outcomes.

Approximately 39.95 million SOL in additional support — about $2.9 billion — is still needed before signaling closes on Aug. 18. If the threshold is not reached by that date, the proposal would not advance to a formal vote under current rules.

Governance Context

SIMD stands for Solana Improvement Document, the technical proposal process core developers use for protocol changes. SGP stands for Solana Governance Proposal, the newer stake-weighted voting mechanism that sits above the SIMD process.

The governance proposal page tracks real-time signaling data.

The 15% signaling threshold was established by the Solana Foundation in July as a gating mechanism. Its purpose is to ensure the validator set only votes on questions with meaningful ecosystem impact, leaving routine technical modifications within the standard SIMD process.

Notably, Helius — which has supplied 16.03 million of the 24.94 million SOL gathered — employs the engineer behind SIMD-0550. Clearing the threshold would require several more validators of comparable size to decide the emissions question warrants their support. At the current pace, with two weeks remaining, that support has not yet materialized.

Source: CoinDesk