TL;DR
- 21Shares analyzes two Solana governance proposals that would cut staking yield in half over a two-year period.
- Proposal SIMD-550 doubles the protocol’s annual disinflation rate. SIMD-553, on the other hand, introduces a fee-burning mechanism tied to financial activity.
- Both proposals project cutting emissions by between $1.4 billion and $1.5 billion over six years, strengthening Solana’s structural scarcity.
Digital asset manager 21Shares published an analysis examining two active governance proposals on the Solana network: SIMD-550, driven by Helius, and SIMD-553, presented by research firm Temporal.
The second was approved and merged on July 20, 2026, while the first entered voting on August 23. Together, both initiatives would cut staking yield in half within approximately two years and make SOL structurally scarcer.
21Shares’ Bullish Arguments
SIMD-550 targets directly the protocol’s inflation, which represents the largest portion of the current staking yield, estimated at 5.25%. The proposal doubles the annual disinflation rate, from 15% to 30%, compressing the timeline to reach the terminal rate of 1.5% from 2032 to the first half of 2029.
The projected yield would fall to 4.34% in the first year, 3% in the second, and 2.25% in the third. SIMD-553, for its part, introduces a burn fee on compute units requested by financial activity, increasing the daily destruction of SOL from the current 600–800 tokens to a range of 7,500–9,000 SOL, equivalent to between $712,500 and $855,000 at current prices.
21Shares underscores that the impact on staking income will be direct: a yield drop from 6% to 3% over two years cuts income per staked unit in half. However, the analysis notes that Solana’s staking ratio, at 67.93%, nearly doubles Ethereum’s 34.14%, and that the proposals seek to redirect that capital toward productive uses within the network’s DeFi ecosystem. The rationale is that lower staking yields incentivize the search for onchain yield, boosting activity and fee revenues.
Historical Precedents and Market Signals
21Shares cites two precedents. The implementation of EIP-1559 on Ethereum, in August 2021, generated a 37% rise in the first month and 60% over three months, although that period coincided with the cycle’s peak. Cosmos Proposal 848, which halved maximum inflation in November 2023, produced a 25% gain in the first month, partly driven by anticipation surrounding Bitcoin ETFs. In both cases, external variables amplified results beyond the governance changes themselves.
The 21Shares analysis concludes that Solana’s appreciation could partially offset the decline in yield per unit if the scarcity narrative consolidates, although it warns that past performance does not guarantee future results and that staking rates are subject to network conditions.
