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SOL Two Solana governance proposals are advancing to formal votes that could structurally reshape SOL's supply and pledge economies, according to an analysis by 21Shares on August 26, which will reduce issuance by approximately 1.4 billion to 1.5 billion U.S. dollars over six years, while halving pledge yields over two years. SIMD-550 was proposed by Helius and has been in real-time voting since August 23;SIMD-553 was submitted by Temporal and was approved and merged on July 20.
Specific changes to the two proposals
SIMD-550 targets protocol inflation, which is Solana's largest single source of pledge proceeds of approximately 5.25% as of August 24. It doubled the annual online inflation decline rate from 15% to 30%, shortened the time to reach Solana's 1.5% terminal inflation rate from approximately 5.7 years to 2.8 years, reaching that level in the first half of 2029 rather than the first half of 2032. 21Shares predicts that the nominal pledge yield will fall to approximately 4.34% in the first year, 3% in the second year, and 2.25% in the third year.
SIMD-553 increases the cost of burning computing units requested for financial activities; under current network activity, the daily burning volume will increase from approximately 600 to 800 SOL to approximately 7500 to 9000 SOL, worth approximately US$712,500 to US$855,000 as of August 24.
Pledge yield and security budget
Yield compression is straightforward: Pledge revenue is proportional to the nominal rate of return, so a reduction from approximately 6% to 3% would approximately halve the pledge revenue per unit of pledge SOL. Solana's pledge rate is close to 67.93%, almost double Ethereum's 34.14%, and the proposals are partly aimed at squeezing capital out of pledges and into the broader Solana economy. The supply-side shift echoes the broader inflation and security budget debate underway between Ethereum and Solana, in which lower circulation must be weighed against maintaining verifier remuneration.
Matters still to be decided
Neither result is determined. The design of the validator voting fee for SIMD-553 remains unresolved, and the cost could rise slightly or as much as 21 times, squeezing validator profitability while the SIMD-550 cuts its yields. Based on SIMD-550 predictions, of the 738 validators, 2 are expected to become unprofitable in the first year and increase to 30 in the third year. Two proposals have been advanced into formal Solana governance proposals SGP-0002 and SGP-0003, which still require a two-thirds absolute majority in the pledge weight vote. Recent protocol changes, such as reducing slot times to 350 milliseconds, show how these community votes can still change the final result.
