Solana’s Double-Disinflation Proposal: What it Means for SOL Supply, Staking Rewards

Solana validators have approved SGP-0002, also called Double Disinflation, setting the network on a path toward faster reductions in new SOL issuance. According to finalized governance results, the proposal received 67% support, with 25.16% voting against and 7.84% abstaining. Participation reached 60.7% of the eligible stake.

Solana Approves Faster Inflation Reduction

SGP-0002 raises Solana’s annual disinflation rate from 15% to 30% while keeping the long-term inflation target unchanged at 1.5%.

According to Solana Compass, the network could reach that terminal rate in about 2.8 years instead of roughly 5.7 years under the previous schedule. The proposal is expected to result in around 18.9 million fewer SOL being issued over six years, reducing dilution for holders.

The vote involved more than 433 million SOL in participating stake. Around 176.3 million SOL voted in favor, 66.2 million voted against and 20.6 million abstained. The proposal passed only slightly above the required two-thirds threshold.

Large validators were divided. Figment, the biggest voter shown in finalized data with 17.1 million SOL staked, voted against the proposal. Helius and Jupiter largely supported it. Kraken initially voted against the measure, but by the end of voting, more than 90% of its roughly 8.9 million SOL voting stake backed SGP-0002.

Lower Issuance Could Reduce Staking Rewards

The change is not active immediately. Validator software must first implement the double_disinflation_rate feature gate, after which activation can occur at an epoch boundary.

Lower inflation improves SOL’s long-term supply profile, but it also reduces inflation-funded rewards. Bitwise’s Solana staking ETF recently held about 8.18 million SOL valued at near USD 622 million, with roughly 99% staked and a reported net staking reward rate of 5.84%.

As issuance declines, staking yields could also fall unless network fees and other revenue sources compensate validators and delegators.

Solana Rejects Separate Fee Proposal

Stakeholders rejected SGP-0003, the Resource and Inclusion Fee proposal. It received 53.9% support, below the two-thirds requirement.

The plan could have increased token burning to an estimated 7,500-9,000 SOL daily at its highest stage, compared with roughly 648 SOL under the existing mechanism. However, critics raised concerns about unpredictable transaction costs.

Network Activity Strengthens the Debate

Solana processed a record 4.2 billion transactions in July, up 13.5% from June and about 91% from December 2025. During August 17-23, non-vote transactions reached approximately 1.32 billion, another weekly record.

The approval therefore creates a clear trade-off: lower issuance may strengthen SOL scarcity, while reduced staking rewards could pressure validator economics. The next key milestone is technical activation and how stakers, validators and institutional products respond. That balance will determine whether faster disinflation benefits SOL holders without weakening incentives that help secure the network.

Also Read: What is Solana Staking: Know Rewards, Risks, How SOL Staking Works

FAQs:

1. What is Solana’s Double Disinflation proposal?

SGP-0002 increases Solana’s annual disinflation rate from 15% to 30%. The long-term inflation target remains unchanged at 1.5%, but the network is expected to reach it much sooner.

2. How much support did SGP-0002 receive?

The proposal received 67% support, while 25.16% voted against and 7.84% abstained. Overall participation reached 60.7% of eligible stake.

3. How will the proposal affect SOL supply?

The faster disinflation schedule is estimated to result in around 18.9 million fewer SOL being issued over six years. This reduces dilution for existing SOL holders.

4. Will Solana staking rewards decrease?

Potentially, yes. Lower inflation means fewer newly issued SOL are available for staking rewards, although network fees and other validator revenue could partly offset the decline.

5. Is the new Solana inflation schedule already active?

No. Governance approval establishes support for the change, but validator software must still implement and activate the double_disinflation_rate feature before the new schedule takes effect.