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SOL Solana (SOL) is preparing to tighten the speed at which new tokens enter circulation while increasing the proportion of destruction users paying transaction fees. According to a report released on August 3, preliminary votes on the two related proposals will be held later that day. These measures involve the speed at which Solana's network-native token SOL is added and the proportion of each transaction fee that is permanently removed (i.e.,"destroyed"). Destroying tokens means sending them to an unavailable address so that they can never be used again, permanently reducing the overall supply.
Solana is a decentralized public blockchain network with no central authority to record transactions and run applications. It is known for its fast, low-cost transactions, which makes it a popular platform for cryptocurrency trading, payments and tokenization of real-world assets. Its native token, SOL, is used to pay for network fees and reward participants who help maintain network security.
Changes brought by passage of the proposal
If both proposals are passed, Solana's annual inflation contraction rate will rise to 30%. The inflation deflation rate referred to here refers to the rate at which the network reduces the generation of new tokens every year. A higher rate means that the amount of token issuance decreases faster. This change will reduce SOL new issuance by approximately $1.36 billion over the next six years compared to current plans.
Theproposal would also increase the amount of SOL destroyed per day. The average daily destruction volume is expected to climb from the current approximately 650 tokens to approximately 9,000. Destruction operations permanently remove tokens out of circulation, so higher destruction rates steadily reduce the available supply.
Combined impact on SOL supply
Overall, these two changes are moving in the same direction: reducing the generation of new tokens while destroying more existing tokens. The report points out that this combination will help relieve supply pressure on SOL by gradually tightening the number of available tokens.
The results of the preliminary vote will determine whether these proposals can be further advanced in Solana's governance process.
