Solana governance plans could cut staking yield to 2.25%
Two proposals-SIMD-550 and SIMD-553-could lower Solana staking yields to about 2.25% in three years and cut SOL emissions by up to $1.5 billion over six years.
Two Solana governance proposals, SIMD-550 and SIMD-553, would change inflation and burn rules and could reduce net SOL emissions by an estimated $1.4 billion to $1.5 billion over six years, according to Matt Mena, senior crypto research strategist at 21Shares.
SIMD-550, proposed by Helius and currently in governance voting, would double the annual disinflation rate from 15% to 30%. The proposal would move the network toward a terminal inflation rate of 1.5% around the first half of 2029, compared with the current projection near 2032.
SIMD-553, submitted by Temporal and approved in July, adds additional token burns tied to requested compute units. At current activity levels, daily SOL destruction could rise from roughly 600–800 SOL to between 7,500 and 9,000 SOL, the proposals’ models show.
Together, the changes would lower inflation-driven rewards. Solana currently yields about 5.25% from staking, a mix of protocol inflation, transaction fees and MEV revenue. Under SIMD-550 projections, nominal staking yield would fall to about 4.34% in year one, roughly 3% in year two and near 2.25% in year three.
Validator economics are a central issue in governance discussions. Some major validators, including Forward Industries and Blueshift, have voted in support of SIMD-550, while Everstake and P2P.org have voted against it. Models used by analysts show two validators could become unprofitable in the first year and about 30 by year three if fees and other revenues do not rise.
About 67.9% of SOL supply is currently staked, compared with roughly 34.1% for Ethereum. Lower passive returns for stakers could encourage holders to move capital into decentralized finance activities such as lending, trading and liquidity provision. Increased network activity could raise transaction fees and MEV, which would affect validator revenue and net supply dynamics.
Matt Mena of 21Shares wrote: “We believe inflation should be tied to economic performance and growth to help offset the decline in staking revenue.”
The vote on SIMD-550 is ongoing. Final vote results and the implementation details of SIMD-553 will determine how quickly staking yields decline and how token supply changes over time.
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