Solana New Proposal Aims to Drastically Reduce Staking Rewards and Enhance SOL Scarcity

Odaily News, according to a 21Shares report, Solana is advancing two governance proposals, SIMD-550 and SIMD-553, which could significantly reshape the economic model for SOL holders over the next two years.

SIMD-550 proposes increasing Solana's annual inflation decay rate from 15% to 30%, allowing it to reach the terminal inflation rate of 1.5% more quickly, with nominal staking yields expected to drop to approximately 2.25% within three years. SIMD-553, which was approved and merged on July 20, will introduce a burn fee for compute unit requests, increasing daily SOL burn volume from roughly 600–800 tokens to approximately 7,500–9,000 tokens.

The report suggests that while declining staking income will directly impact validator and staker earnings, lower issuance combined with higher burn rates could improve SOL's long-term supply-demand structure, potentially driving some capital toward Solana's on-chain DeFi ecosystem.