Solana’s network economics could be headed for a significant supply squeeze as two governance proposals—SIMD-550 and SIMD-553—move through the ecosystem. According to digital asset manager 21Shares, if both changes are implemented together, total SOL issuance over a six-year period could fall by approximately $1.4 billion to $1.5 billion.
SIMD-550, driven by Helius and entering voting on August 23, 2026, aims to double the protocol’s annual disinflation rate from 15% to 30%. That would accelerate the network’s path to its terminal inflation target of 1.5%, pulling the timeline forward from roughly 2032 to the first half of 2029. The trade-off is a lower nominal staking yield, which 21Shares projects would decline to about 4.34% in the first year, 3% in the second, and 2.25% in the third year of the new model, down from an estimated current level of around 5.25%.
SIMD-553, presented by research firm Temporal, was approved and merged into the codebase on July 20, 2026. It introduces a fee-burning mechanism tied to compute units requested during financial operations. Under current network activity, Solana burns about 600 to 800 SOL per day. 21Shares estimates the new mechanism could lift daily burns to between 7,500 and 9,000 SOL, roughly a tenfold increase and equivalent to about $712,500 to $855,000 at current prices.
Combined, the two proposals would cut net token issuance by the $1.4 billion to $1.5 billion range over six years. 21Shares’ analysis notes that Solana’s staking ratio stands at 67.93%, nearly double Ethereum’s 34.14%, and argues lower staking rewards could push capital toward productive DeFi use cases on the network, potentially boosting onchain activity and fee revenue. The report cites historical precedents such as Ethereum’s EIP-1559 and Cosmos Proposal 848, though it cautions that external market factors also amplified those bullish moves and past performance is not a guarantee of future results.
Some uncertainty remains: SIMD-550 still has to pass final voting, and the actual burn impact of SIMD-553 will depend on how validators structure the fee mechanism.
