Solana Doubles Its Disinflation: Implications for SOL Supply
A single last-minute vote switch by a Kraken validator flipped Solana's inflation outcome just hours before the deadline, and the financial cost falls squarely on the validators who supported it.
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Solana’s (CRYPTO:SOL) validators voted to double the network’s disinflation rate, passing the proposal by a narrow 0.33-percentage-point margin. This decision was pivotal, as a Kraken validator, holding 8.9 million SOL, switched its vote from against to for just before the deadline. At the same time, Galaxy Digital (NASDAQ: GLXY | GLXY Price Prediction) moved its stake from abstaining to supporting the proposal.
The vote closed on August 28, 2026, with 67.0% in favor, surpassing the required 66.67%. This disinflationary change will remove about 18.9 million SOL from the planned issuance over the next six years. Currently, SOL is trading at $117, up 11% this week and 21% over the month, though it remains down about 40% year-on-year.
The core question for SOL holders is how this vote impacts SOL’s supply. The answer involves three main elements: the size of the change, its timing, and the associated costs—though only the size is confirmed so far.
Doubling Disinflation Removes About 18.9 Million SOL From Six Years of Issuance
Solana compensates its validators—who confirm transactions—with newly created SOL. The issuance rate decreases annually, and disinflation sets the pace. Under the previous schedule, the rate would drop by 15% each year until it reached a floor of 1.5% in 2032. The new rate doubles that reduction to 30% per year, pushing the floor to be reached in the first half of 2029.
The gap between the two schedules means about 18.9 million fewer SOL will be issued over six years, which amounts to roughly $2.2 billion at the current price—about 3% of the approximately 587 million SOL currently in circulation.
While Solana’s inflation rate was at 3.82% as of June, this change does not stop new supply from being created or affect the coins already owned by holders. Instead, it slows overall growth, with long-term effects rather than immediate ones.
Kraken’s 8.9 Million SOL Decided It, and the Cost Falls on Staking Yield
Key network players influenced the vote’s outcome. Validators cast votes based on the stake they hold, meaning a few large operators can significantly affect the results. Just six hours before the voting deadline, the proposal stood at 65.4% in favor, below the threshold.
However, after numerous discussions, Kraken switched to support, and Galaxy changed its position from abstaining to majority support. In the end, the tally was 176.3 million SOL for, 66.2 million against, and 20.6 million abstaining.
This last-minute change had financial implications for Kraken and Galaxy. As operators of staking businesses, their earnings are tied to the rate of new issuance. The proposal’s own model estimates that the first-year staking yield will be 4.34% under the new schedule compared to 4.93% under the old, and by year three, it will fall to 2.25% versus 3.52% previously.
This shift may make around 30 validators unprofitable within three years. Thus, their vote to support the measure meant sacrificing their potential revenue.
The Schedule Has Not Changed Yet, and the Burn Proposal Failed
While the vote reflects a decision, it only provides a mandate. The new disinflation schedule will depend on the technical proposal SIMD-0550, which must go through testing, coordination among Solana’s teams, and activation before any issuance changes take effect.
Similarly, another plan to burn additional SOL, outlined in SGP-0003, failed to gain enough support, so no further measures to cut supply are on the table. Meanwhile, SGP-0001, which sets the future voting procedures, passed with a resounding 86% backing.
What Does the Disinflation Vote Do to SOL Supply?
In summary, the vote will reduce SOL’s supply growth by around 3% over the next six years, but the actual cuts won’t occur until the SIMD-0550 proposal is activated. The immediate implications affect staking yields, placing the cost on those who operate stake pools.
For investors, the key figures to watch are the SIMD-0550 activation date and demand from Solana-focused investment funds. Slower supply growth could push prices higher, but that will depend significantly on market demand and buying activity, especially as SOL seeks to break above the $120 mark, where it has faced resistance multiple times this year.
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Sam Daodu is a crypto analyst who's spent nearly a decade making blockchain understandable—no easy task when most whitepapers read like fever dreams. He writes for 24/7 Wall St., covering Bitcoin, altcoins, and crypto market analysis for investors. Before crypto, he was a tech writer (back when explaining "the cloud" was peak innovation). Since 2018, he's written for CoinTelegraph, Yahoo Finance, The Block, Cryptonews, Zypto, Rain, and more—basically anywhere people want crypto news without the headache. Sam runs MacLabs Marketing, a content agency for crypto brands tired of sounding like AI wrote their website. He also publishes free crypto education on his site for Web3 enthusiasts who think "gas fees" is a typo. When he's not writing or staring at charts, Sam's either: - Watching anime (currently convinced One Piece has better tokenomics than most altcoins) - At the gym sculpting himself into a Greek god - Listening to the music your mum warned you only bad boys listen to Connect: LinkedIn | Email | MacLabs Marketing
