Solana validators have approved a governance proposal that will double the network’s annual disinflation rate, resulting in a sharper reduction of future SOL token issuance.
Proposal SGP-0002 ignites network-wide debate
The proposal, SGP-0002—also called the Double Disinflation plan—raises Solana’s annual disinflation rate from 15% to 30%. Despite this accelerated reduction, the network’s terminal inflation target remains at 1.5% per year.
Voting on SGP-0002 concluded with 67% support, 25.16% opposition, and 7.84% abstentions. Participation reached 60.7% of eligible stake, highlighting broad community involvement.
Under the new inflation schedule, Solana is expected to reach its 1.5% terminal inflation rate in approximately 2.8 years, compared to about 5.7 years under the previous model. According to data from tracking service Solana Compass, this adjustment will result in roughly 18.9 million fewer SOL being issued over the next six years, aiming to reduce dilution for SOL holders, while simultaneously diminishing staking rewards for validators and delegators.
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AAPLMini dictionary: Solana Compass, an independent analytics and governance tracking platform for the Solana blockchain, provides real-time data on validator votes, network inflation, and historical metrics.
| Schedule | Terminal Inflation Rate | Years to Reach Terminal Rate | Cumulative New SOL Issued (6 Years) |
|---|---|---|---|
| Previous | 1.5% | 5.7 | +18.9 million |
| SGP-0002 | 1.5% | 2.8 | 0 |
Major validators reveal divided stance
SGP-0002 represented the first binding governance vote of its kind for Solana. The same process also saw the community ratify a new Solana Constitution and reject a separate proposal on resource and inclusion fees.
Some of the most influential validators were sharply divided. Figment, which held 17.1 million SOL in voting stake and is a prominent staking provider, cast its entire vote against the double disinflation plan. In contrast, validator operators Helius and Jupiter provided strong endorsements for the proposal.
Kraken, the US-based cryptocurrency exchange and one of the largest SOL validators, initially voted against SGP-0002 when voting opened, lowering support below the approval threshold. However, before the deadline, Kraken shifted position, and more than 90% of its 8.9 million SOL voting power ultimately backed the proposal.
Some of Solana’s largest stakeholders, such as Figment and Kraken, changed their votes during the process, resulting in SGP-0002 passing with 67% support and a notable 60.7% voter turnout.
Solana ETFs continue growth despite volatility
This governance development arrives as US-listed Solana investment vehicles continue to attract significant capital. Bitwise’s Solana ETF recently surpassed $1 billion in assets under management, making it the first Solana exchange-traded fund to reach this threshold. The achievement was reported by Eric Balchunas, a Bloomberg ETF analyst, in a recent X post.
Cumulative net inflows into Solana ETFs in the US have reportedly reached $1.7 billion, with minimal outflows since these products launched.
With Bitwise’s Solana ETF surpassing $1 billion in assets, these funds have drawn $1.7 billion overall, signaling ongoing institutional interest despite earlier volatility in $SOL.
