Key Highlights
- 21Shares analyzed SIMD-550 and SIMD-553, two Solana proposals targeting network inflation and SOL token burns.
- The measures could reduce nominal staking yields from roughly 5.25% currently to around 2.25% within three years, depending on network conditions.
- SIMD-550 would increase Solana’s annual disinflation rate from 15% to 30%, bringing the 1.5% terminal inflation target forward to the first half of 2029.
A report from 21Shares, a crypto-native asset manager, examines two Solana governance proposals that would alter the network’s inflation schedule and increase SOL burns. The changes could reduce staking yields while accelerating the reduction in token emissions.
According to a report published on Wednesday, SIMD-553, submitted by research firm Temporal, was approved and merged on July 20, 2026. SIMD-550, proposed by RPC and API platform Helius, entered a formal vote on August 23. Both have advanced to Solana Governance Proposals SGP-0002 and SGP-0003 and require a two-thirds supermajority of staked SOL to pass.
Current yield structure and proposed changes
As of August 24, 2026, Solana’s staking yield stood at approximately 5.25%. The largest component was protocol inflation at roughly 3.78%, with the balance coming from transaction fees, priority tips, and maximal extractable value (MEV), which contributed about 2%.
SIMD-550 would double the annual disinflation rate from 15% to 30%. This would shorten the path to the network’s 1.5% terminal inflation rate from about 5.7 years to 2.8 years, reaching the target in the first half of 2029 instead of 2032.
Under the proposal, nominal staking yields are projected at approximately 4.34% in the first year, 3% in the second year, and 2.25% in the third year.
SIMD-553 would impose a burn fee on requested compute units associated with financial activity. At recent network activity levels, daily SOL burns would increase from 600–800 SOL to an estimated 7,500–9,000 SOL, equivalent to $712,500–$855,000 as of August 24.
The report noted that this level of burning would not fully offset daily inflation of roughly $4.5 million. Together, the two measures are projected to reduce emissions by approximately $1.4 billion to $1.5 billion over six years.
Implications for stakers and validators
A decline in nominal yield from roughly 6% to 3% would halve staking revenue per unit of staked SOL if other factors remain constant, the report stated.
Validator economics could also face additional pressure. The final design of voting fees under SIMD-553 remains unresolved and could raise costs modestly or by as much as 21 times. Projections under SIMD-550 indicate that two of 738 validators could become unprofitable in the first year, rising to 30 by the third year.
Solana’s staking ratio stands at approximately 67.93%, nearly double Ethereum’s 34.14%. The report said the proposals are intended in part to encourage capital to move from staking into other on-chain uses such as decentralized finance.
Historical comparisons
The 21Shares analysis referenced two earlier network changes.
Ethereum’s EIP-1559 burn mechanism, introduced in August 2021, coincided with gains of 37% over one month and 60% over three months, though the period overlapped with a market peak.
Cosmos’s Proposal 848, which halved maximum inflation in November 2023, coincided with gains of 25% over one month and 10% over three months during a period of rising anticipation around Bitcoin exchange-traded funds.
The report cautioned that external market conditions influenced both outcomes and that past performance does not predict future results. Staking rewards remain variable and depend on network conditions.
Context on other Solana proposal
Other Solana proposals have also gained attention. In May 2026, Solana co-founder Anatoly Yakovenko voiced support for SIMD-547, a proposal that aims to increase SOL burns while preserving the network’s low transaction costs.
Authored by the user @cavemanloverboy, the measure would introduce a resource-based base fee that is entirely burned. The proposal notes that Solana’s existing burn mechanism currently has minimal effect on reducing the overall token supply, even though the network handles millions of transactions each day.
The proposals examined by 21Shares would therefore affect different parts of Solana’s token economics: SIMD-550 focuses on reducing inflation more quickly, while SIMD-553 would increase burns tied to certain compute-unit requests.
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