A new governance proposal suggests accelerating the pace at which the Solana network reduces new SOL issuance, potentially halving the time needed to reach its long-term monetary target. This proposal focuses solely on lowering supply growth without altering validator rewards or the staking system.
Under the proposed model, Solana's annual disinflation rate would reach 1.5% within three years, as opposed to the current six years. This updated trajectory would remove more than 22 million SOL from expected circulation over the same timeframe.
Staking Rewards Unchanged, Yields Gradually Decrease
The proposal emphasizes that staking incentives would remain intact, with no immediate reductions to payouts. Instead, yields would taper naturally as the supply reduction accelerates. If validator participation remains at current levels, staking returns could decrease from approximately 6.4% to around 2.4% over the next three years. Helius CEO Mert Mumtaz highlighted the significance of this proposed change on X.
ETF Momentum Intensifies Debate
Institutional interest in Solana is growing concurrently with this tokenomics vote. Major financial institutions like Bitwise, Grayscale, Fidelity, and VanEck have already introduced SOL spot ETFs to U.S. markets. Additionally, 21Shares launched its TSOL ETF on the CBOE on November 19. With these products now active, the outcome of the supply decision holds increased importance for investors viewing SOL as a long-term asset.
Price Reflects Broader Market Trends, Not Governance Debate
Currently, SOL's price movement aligns with the broader downturn across digital assets, rather than reacting to the ongoing governance debate. The token is trading at $126.62, reflecting a 33% decline in the past month. Despite this, trading activity remains resilient as market participants closely monitor the proposal's progress.
Decision to Shape Solana's Future Monetary Policy
The adoption of the accelerated disinflation path hinges entirely on community approval. Validators and stakeholders will determine whether Solana implements the faster supply-tightening model or maintains its current course. The outcome will significantly influence SOL's economic behavior in the coming years, impacting supply dynamics, staking returns, and the network's overall value proposition.