Solana achieves a historic milestone with its first on-chain governance decision, significantly reducing inflation

Solana Network has completed its first legally binding on-chain governance vote since its inception. All three proposals (SGP-0002, SGP-0003, and a constitutional matter) met the quorum requirements and were approved, marking a fundamental shift in Solana's supply structure. On the day of the vote, the price of SOL surged, exceeding $105 for the first time since January, and recorded an increase of approximately 44% for the month of August, representing its strongest monthly performance since 2024. SGP-0002 proposes doubling the disinflation rate from 15% to 30% per year. Solana was already converging towards its final inflation floor of 1.5%, and this change will accelerate that timeline from 2032 to 2029. Approximately 18.9 million SOL will be removed from the projected issuance schedule, and this reduction in issuance will directly impact the returns for stakers. According to analysis by 21Shares, the staking yield, currently around 5.25%, could decrease to as low as 2.25% within three years, potentially leading to the exit of smaller validators due to reduced profitability. SGP-0003 addresses the supply side from a different perspective. It differentiates transaction fees into a base fee (paid to validators) and a resource fee linked to computational resource usage, with the resource fee being burned in its entirety. The amount of SOL burned, currently around 650 per day (approximately $48,000), could potentially increase to a maximum of 9,000 SOL (approximately $668,000). Not all stakeholders agreed with the vote. Solana Company (HSDT), a Nasdaq-listed financial company, voted in favor of the constitutional matter but against the two economic changes. This was because institutional stakers prioritize predictable returns over a rapid decline in yields. In contrast, DeFi Development Corp (DFDV) voted in favor of all three proposals and immediately took action with its funds. DFDV purchased 19,000 SOL at an average price of $98.14, totaling $1.86 million, increasing its holdings to approximately 2.33 million SOL. This was the first SOL purchase since October 2025, and a portion of the funds was raised through the liquidation of a ZeroStack position. DFDV's stock price rose by more than 16% on Thursday and doubled over the course of the month. On the demand side, there was also significant positive news. Charles Schwab announced plans to add SOL, AVAX, and LINK to Schwab Crypto, potentially making SOL accessible to millions of brokerage accounts. In addition, Pump.fun surpassed 100,000 daily active users for the first time since its launch, achieving a daily revenue of $3.27 million, the second-highest record since January 2025. The new Solana memecoin, $fone, also saw significant activity, reaching a market capitalization of $34 million on its debut day, indicating a vibrant ecosystem. The combination of supply contraction, expanded distribution channels, renewed institutional buying, and app growth is creating a strong bullish environment for Solana in September.