- 21Shares says SIMD-550 and SIMD-553 could reshape Solana’s issuance and burn mechanics, reducing supply by up to $1.5 billion.
- SIMD-550 would double annual disinflation to 30%, moving Solana toward its 1.5% terminal inflation target by H1 2029.
- SIMD-553 could raise daily SOL burns from 600-800 to 7,500-9,000 SOL through fees tied to requested compute units.
Solana is considering two governance changes that would alter SOL issuance and burns, according to 21Shares. SIMD-550 would double annual disinflation from 15% to 30%, while SIMD-553 would add burn fees to requested compute units. Together, the proposals could cut issuance by $1.4 billion to $1.5 billion over six years.
Solana Proposals Target Issuance And Burns
Helius submitted SIMD-550, which entered a vote on Aug. 23. The proposal would move Solana toward its 1.5% terminal inflation rate by H1 2029. Under the proposal, staking yield would fall to about 4.34% in year one.
It would then decline to 3% in year two and 2.25% in year three. Solana’s staking yield stood near 5.25% on Aug. 24. Protocol inflation supplied about 3.78%, while transaction fees, tips and MEV supplied the remainder.
The second change, SIMD-553, came from Solana R&D firm Temporal. Development teams approved and merged it on July 20, adding a burn fee tied to requested compute units.
SIMD-553 Could Raise Daily SOL Burns
At current network activity, 21Shares estimates daily SOL burns could rise from 600-800 SOL to 7,500-9,000 SOL. That equals about $712,500 to $855,000. However, current burns would not fully offset daily inflation, estimated at roughly $4.5 million.
The two proposals together could reduce SOL issuance by $1.4 billion to $1.5 billion across six years. Meanwhile, SIMD-553 still has an unresolved validator voting-fee design. Validator costs could increase modestly or reach about 21 times current levels.
Lower Yield Reshapes Validator Economics
21Shares estimates two of 738 validators could become unprofitable in year one. That number could reach 30 by year three under SIMD-550 projections. 21Shares places Solana’s staking ratio at 67.93%, compared with Ethereum’s 34.14%.
It says lower staking returns could redirect capital toward DeFi and other on-chain uses. However, MEV and tips would need to rise by about 55% to 95% to replace lost staking revenue. The final economic impact depends on the SIMD-550 vote and SIMD-553’s validator fee design.
