SOL reached $109 on Aug. 27, its highest level of 2026, as Solana’s first formal on-chain governance vote moved into counting with measures that would accelerate the network’s decline in token issuance and substantially increase fee-related token burns. SOL gained 44% during August and remained more than 60% below its record high of $293.
The ballot covered three proposals, SGP-0001 through SGP-0003, and ran from Aug. 22 to Aug. 27. Together, they would establish Solana’s formal governance process, speed up its scheduled disinflation, and redesign the base-fee structure so more SOL is permanently removed from supply.
The votes do not immediately change Solana’s code. Passage would give the measures governance approval, while the underlying protocol changes would still require Solana Improvement Documents, software implementation, testing and activation by the network. That process could take months.
Faster disinflation moves terminal rate to 2029
SGP-0002 proposes doubling Solana’s annual disinflation rate to 30% from 15%. Under the current schedule, SOL inflation is about 3.8% and is designed to reach a 1.5% terminal rate in 2032. The proposed schedule would bring that target forward to 2029.
The proposal, drafted by a Helius engineer, estimates that the faster curve would reduce SOL issuance by roughly 18.9 million tokens over six years. At a SOL price near $109, that amount would be worth about $2.1 billion, although the proposal’s earlier estimate put the value near $1.5 billion at the prices used in its model.
Voting data published before the deadline showed SGP-0002 had reached 33.84% participation, clearing the one-third quorum threshold. “Yes” votes represented 25.84% of total voting weight, against 5.54% voting no and 2.65% abstaining. Among non-abstaining votes, support exceeded 80%.
The change would also reduce staking rewards over time. The modeled estimate cited in the proposal places staking returns at about 2.25% after three years, down from roughly 5.25% under the existing issuance schedule. That trade-off sits at the center of the debate: less issuance reduces dilution for token holders, while lower rewards could pressure the operating economics of validators.
A model published by 21Shares found that some higher-cost validators could become unprofitable under faster disinflation. If smaller operators leave, delegated stake may flow toward larger validators, increasing concentration in the short term.
Fee redesign targets a wider gap between issuance and burns
SGP-0003, submitted by Temporal, addresses the other side of Solana’s supply equation: how transaction fees are paid and burned.
The proposal would divide Solana’s flat base transaction fee into two components. A fixed entry fee would go to the validator producing the block, while a resource-based fee linked to computational use would be fully burned. Burning means the tokens are permanently removed from circulation.
Under the model presented with SGP-0003, average daily SOL burns would rise from about 650 SOL to between 7,500 and 9,000 SOL. That would represent roughly a 12-fold to 14-fold increase, although the final result would depend on transaction volume and the mix of activity using the network.
Solana currently issues around 60,000 SOL a day, according to the governance materials. Fee burns have been comparatively modest because the network’s existing design sends a large share of fees to validators.
Since the February 2025 approval of SIMD-0096, 100% of priority fees have gone to block-producing validators, with no burn component. Priority fees and Jito tips have accounted for more than 85% of daily network revenue, leaving the base transaction fee as the main source of burn pressure. Only half of that base fee is currently destroyed.
The proposed change would preserve a direct payment for block producers while making compute-intensive transactions contribute more to token burns. It would connect fee destruction more closely to actual resource use rather than applying the same burn treatment across transactions with very different computational demands.
Governance structure puts delegated stake in focus
SGP-0001 would create the governance system used for the package and future votes. Voting power would be weighted by staked SOL, but individual delegators would be able to override their validator’s vote.
That structure gives validators a central role in governance because they generally cast votes with delegated stake unless token holders actively choose a different position. The outcome therefore depends not only on the number of validators participating, but also on how much stake is delegated to them and whether delegators use the override option.
Disclosed allocations showed Helius supporting the proposals with about 16 million SOL, while Jupiter backed them with 12.47 million SOL. Jito authorized yes votes on all three measures through its internal governance process.
Solana Company, the Nasdaq-listed firm trading under HSDT, supported SGP-0001 but voted against the issuance and fee proposals. Its second-quarter financial results reported $2.526 million in revenue, including $2.512 million from staking revenue. Lower issuance would directly affect a business model tied heavily to staking returns.
The split reflects a practical conflict within Solana’s ecosystem. Token holders seeking lower dilution may favor accelerated disinflation, while validators and staking-focused businesses face reduced reward income. The fee proposal creates a similar balance by retaining validator compensation through fixed entry fees while moving more compute-related fees into the burn mechanism.
High activity has not translated directly into fee revenue
The governance debate arrives after a period of high transaction activity but weaker protocol revenue. Solana processed 25.3 billion transactions in the first quarter of 2026, according to the figures presented around the vote, more than 120 times Ethereum’s reported total for the same period. Solana also held around 30% of spot decentralized-exchange market share for seven consecutive quarters.
Galaxy Research reported that Solana network fees fell 44% quarter over quarter to about $155 million in the second quarter of 2026. The firm estimated revenue, or REV, at $51 million for the quarter, down 43% from $89.8 million in the first quarter. Galaxy placed Solana fourth in its multi-chain revenue ranking, with a 12% share behind Hyperliquid, TRON and Ethereum.
Those figures show why Solana’s governance package focuses on issuance and fee mechanics rather than treating transaction volume alone as a measure of economic output. The proposals would reduce the number of new SOL entering circulation faster and make a greater share of computational demand contribute to token destruction, while shifting part of the burden toward validator economics.
The package also follows Solana’s failed SIMD-0228 vote in March 2025. That proposal sought an 80% inflation reduction through a dynamic issuance model tied to staking participation, but 61.39% of participating stake voted against it. The current proposals take a less abrupt approach, relying on a faster version of the existing disinflation schedule and a targeted fee redesign.
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