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SIMD-0550 proposes doubling Solana's disinflation rate, cutting baseline staking rewards faster and reaching the 1.5% inflation floor in 2029 instead of 2032.
Created in June 2026 SIMD-0550, titled "Double Disinflation Rate," proposes doubling the speed at which Solana's inflation rate falls, from -15% to -30% per year.
Under the proposal, Solana would reach its terminal inflation rate of 1.5% in ~2.8 years (H1 2029) instead of ~5.7 years (H1 2032). Around 18.9 million fewer SOL would be issued over six years, worth roughly $1.51 billion at the SOL price when the proposal was published, leaving total supply about 2.6% lower than under the current schedule.
The proposal is moving through Solana's governance pipeline. The technical document sits in Review status, and it has been elevated to SGP-0002, a Solana Governance Proposal (SGP) headed for a stake-weighted community vote that requires a two-thirds supermajority to pass. Author Lostin confirmed on the forum in early August that stakers will be able to vote directly through the official dashboard. A successful vote is a mandate to proceed, with activation following through a network upgrade.
In this blog, we take a closer look at what this could mean for institutional Solana staking rewards.
Solana pays staking rewards in newly created SOL every epoch, roughly every two days. The new SOL is shared among stakers in proportion to their stake, minus validator commission. Because new SOL is created each epoch, total supply grows over time. That growth is inflation.
Three numbers define the model: a starting rate, a speed of decline, and a floor. Inflation began at 8% a year when Solana switched it on in 2021, and it has fallen every year since. Disinflation is the speed of that decline. Today, the inflation rate drops by 15% each year. SIMD-0550 doubles that annual drop to 30%. Nothing else changes: the 1.5% floor and the reward mechanism stay the same. As of June 1, 2026, inflation stood at 3.82%.
Below are the projections of how this inflation rate will evolve over the next six years depending on if the proposal is accepted or not.
Staking rewards come mostly from issuance, topped up by MEV tips and block rewards that depend on network activity. SIMD-0550 changes only the issuance part, so activity-based income would make up a growing share of what stakers earn.
At the current staking participation rate of 68%, the proposal's modeling shows the baseline reward rate falling from 5.84% to 4.34% in the first year, compared with a fall to 4.93% under the current schedule. These figures are the baseline nominal staking reward rate, excluding MEV, block rewards, and commissions.
The gap between the two schedules is widest in years two and three:
Both schedules end in the same place. At 68% participation, the baseline reward rate settles near 2.26% either way. SIMD-0550 simply gets there around 2029 instead of 2032. The difference also builds slowly, from about 0.84 million fewer SOL issued in year one to 18.9 million by year six.
Stakers would not see a sudden drop. By design, the reward rate on the day the change takes effect is identical to the current schedule; it then falls faster from that point. The modeling also assumes a 4.5-month gap before activation, to allow for governance and the Alpenglow upgrade.
Finally, lower rewards also mean lower dilution. Every new SOL slightly shrinks the network share of every existing coin, and stakers are the ones who receive the new coins. Using the proposal's year-three figures, a staker earns 2.25% while total supply grows just 1.50%. Stakers stay ahead of dilution under either schedule; the margin simply narrows sooner.
The reward rate and the participation rate balance each other. If rewards fall and some holders unstake, the same issuance is split among fewer coins, lifting the reward rate for everyone who remains. The proposal models three participation scenarios based on Solana's historical range: one year in under the new schedule, the baseline reward rate would be 4.77% at 62% participation, 4.34% at 68%, and 3.98% at 74%.
SIMD-0550 is one of the first proposals to run through Solana's new onchain governance framework, whose rules are defined in SGP-0001. The process runs in fixed stages. A proposal first needs support from 15% of active stake. Reaching that starts an 11-epoch clock: 7 epochs of discussion, 1 epoch to snapshot stake for voting weights, and 3 epochs of voting, around three weeks in total. SGP-0002 cleared the support threshold in early August, and the schedule now runs as follows.
Voting is open to more than validators. Stakers can vote directly, or override their validator's choice, by connecting a wallet to the official dashboard. To pass, "For" votes must equal at least two-thirds of the stake voting For or Against, with abstentions excluded. A yes is a mandate rather than the change itself. The code then ships through the normal client development process and a feature-gate activation, which is why activation would land months after the vote.
If SIMD-0550 passes, institutional stakers should expect baseline rewards to fall from 5.84% today to around 4.34% within a year, then to about 2.25% by 2029. Under the current schedule, rewards would decline more slowly, reaching the same level around 2032. Both paths end at the same 1.5% inflation floor, with about 18.9 million fewer SOL issued along the way. The change would arrive gradually, with no sudden drop and an expected 4.5-month gap before activation.
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