Solana Co-Founder Pushes Fresh Drive To Cut SOL Inflation Through New Burn Proposal
Solana’s monetary policy is back under the spotlight after co-founder Anatoly Yakovenko publicly backed a new attempt to accelerate SOL disinflation. The renewed debate was sparked by a technical proposal on GitHub that aims to overhaul how transaction fees are burned, tying them more directly to resource usage on the network.
The initiative centers on a specification dubbed SIMD‑0457, which proposes a “resource‑based base fee” for Solana transactions. Unlike the current model, this base fee would be fully burned, permanently removing SOL from circulation. The goal is to better align SOL’s supply dynamics with on‑chain activity, giving the token stronger exposure to network usage while being careful not to damage validator economics or decentralization.
Yakovenko Signals Support For Tougher Monetary Discipline
The latest discussion began with a post by pseudonymous Solana researcher “Dr Cavey phd,” who opened a GitHub thread titled “Improving SOL tokenomics via a resource-based base fee.” The post was later amplified on X, where Dr Cavey joked about “making SOL $300 again (for the first time),” clearly hinting at the monetary and price implications of stronger disinflation.
The idea quickly drew reactions from prominent Solana figures. Helius CEO Mert Mumtaz replied with a straightforward “do it,” while Yakovenko added a concise “+1,” signaling his endorsement. Vibhu Norby, Chief Product Officer and interim CMO at the Solana Foundation, responded with an eyes emoji, underscoring that the proposal had caught the attention of core ecosystem leadership.
Yakovenko’s visible support is meaningful because a previous attempt to tighten SOL issuance – SIMD‑0228 – failed to pass governance last year. That earlier effort also aimed at stronger disinflation but faced pushback from parts of the validator and broader community who were wary of changing the economics too aggressively.
Why The Current Burn Is Seen As Insufficient
At the heart of the new proposal is the claim that Solana’s existing burn mechanism is “incredibly tiny and insignificant” relative to overall issuance. The network already burns a portion of fees, but at the current base fee level the effect is marginal, even under heavy usage.
The description in the proposal uses a throughput scenario of 3,000 transactions per second, or roughly 259 million transactions per day. Under today’s settings, a 2,500 lamport base fee burn at that activity level destroys only about 648 SOL per day. Narrowing this to non‑vote transactions – the ones that matter more economically – the effective burn becomes even smaller.
Meanwhile, annualized inflation is estimated around 60,000 SOL per day in new issuance. Against that backdrop, a 648‑SOL daily burn is effectively a rounding error, making SOL’s monetary profile overwhelmingly inflationary despite rising network activity and fee volumes.
Why Not Just Raise Fees Across The Board?
A naive fix would be to simply hike the base fee for every transaction. The proposal’s author explicitly rejects this idea, arguing that a blanket increase would hit the wrong participants and undermine key aspects of Solana’s design.
Retail users and sophisticated searchers already pay high priority fees when they need fast inclusion or to compete in arbitrage and MEV‑sensitive environments. For them, the base signature fee is a small fraction of total cost. In contrast, validators, market makers and other high‑throughput actors often send huge volumes of transactions where the base fee is a more meaningful component of their operating expenses.
Raising the uniform base fee therefore risks two key downsides:
– It could compress validator margins, especially for smaller operators, damaging decentralization by pushing them out of the set.
– It would increase the fixed costs for market makers and other liquidity providers, potentially hurting Solana’s spot market structure and trading depth.
The proposal’s author argues that any change to the burn mechanics must be carefully targeted so that it doesn’t unintentionally penalize the infrastructure and liquidity providers that make the network usable.
The Core Idea: A Resource‑Based Base Fee That Is Fully Burned
Instead of a single flat base fee, SIMD‑0457 builds on Solana’s existing resource accounting. Every transaction has a cost profile defined by:
– Compute units consumed
– Amount of data loaded
– Number and type of write locks
– Other resource‑intensive operations
The proposal suggests introducing a resource-based base fee charged per “cost unit” requested. Specifically, it suggests charging and burning 0.1 lamport for each cost unit. This fee would be entirely burned rather than shared, increasing the rate at which SOL is permanently removed from supply as on‑chain activity scales.
The 0.1 lamport figure is not arbitrary. According to the author, it was chosen to avoid materially increasing costs for market makers, whose typical oracle updates and related transactions request fewer than 2,500 cost units. That design choice attempts to preserve the economics of high‑frequency infrastructure transactions while still creating a strong link between heavy resource consumption and burn volume.
How Different Transactions Would Be Affected
The proposal includes several examples illustrating how the new fee structure would impact different transaction types:
– A Shekel‑to‑SOL swap via a centralized exchange route like OKX currently pays a 5,000 lamport base fee plus a 130,980 lamport priority fee. Under the new mechanism, it would also incur an additional 82,432 lamports in resource-based burned fees, roughly a 60% increase in total cost.
– A SOL‑to‑TRANSCEND trade via a meme‑coin oriented platform such as Pump, which today may pay no priority fee, would see costs jump far more dramatically – an estimated 639% increase – because the base, resource‑linked component becomes a much larger share of total cost.
– A USDC‑to‑99% transaction via an orderflow‑routing tool like DFlow, which already uses a large priority fee, would see only about a 2% increase in overall cost, since the new base fee would be small compared to its existing priority component.
– A typical Zerofi oracle update transaction, which is critical infrastructure but relatively lightweight in requested resources, would experience roughly a 3% fee increase under the new model.
These examples highlight that the proposal intentionally targets heavier, more resource‑intensive transactions with higher burns, while keeping fees for critical infrastructure and high‑priority retail flows relatively stable.
How Much More SOL Could Be Burned?
To estimate the effect on SOL supply, the author considers blocks requesting between 50 million and 300 million total cost units. At the proposed 0.1 lamport per cost unit, that range translates to roughly 1,080 to 6,480 SOL burned per day. The author’s own “hunch” is that real‑world usage would likely sit closer to around 2,160 SOL per day.
This new burn would come in addition to the existing ~648 SOL per day burned via the current base fee mechanism. Even at the higher end of the estimate, the combined burn remains far below the roughly 60,000 SOL issued per day via inflation, underscoring that the proposal is disinflationary rather than outright deflationary.
Some commenters provided data from recent compute‑unit usage to refine the estimates, suggesting that current demand might support a burn in the 1,500 to 1,800 SOL per day range under the new system. That is still meaningful, but not enough on its own to reverse inflation.
Community Concerns: Is The Burn Big Enough To Matter?
Reaction to the proposal quickly zeroed in on whether the magnitude of the additional burn justifies the complexity and potential side effects. One line of criticism argues that even a few thousand SOL burned per day is small relative to the current inflation rate, which sits around 3.8% annually.
At present requested resource levels, the new mechanism would reduce net issuance by only a fraction of a percent – roughly on the order of 0.1% disinflation, according to one commenter’s back‑of‑the‑envelope math. To push Solana toward a 1% annual deflation rate, fee‑driven burning would need to scale to roughly ten times current transaction demand, assuming fee levels and user behavior remain stable.
This raises an important strategic question: is it better to optimize SOL’s tokenomics now in anticipation of future high throughput, or to wait until the network is consistently processing orders of magnitude more economically meaningful transactions? Supporters see this as laying the groundwork for a sustainably disinflationary future, while critics worry it may not justify the near‑term trade‑offs.
Validator Economics, Decentralization And Long‑Term Security
Any change to Solana’s fee and burn structure inevitably touches validator incentives, a cornerstone of network security. Validators are paid in newly issued SOL and a share of collected fees; if their economics degrade, participation and geographic or infrastructural diversity could suffer.
The resource-based fee proposal tries to thread this needle by:
– Avoiding a massive, uniform base fee hike
– Minimizing impact on high‑volume but low‑margin oracle and infrastructure transactions
– Concentrating burn impact on heavier, often more speculative or less latency‑sensitive flows
Still, the long‑term question remains: as protocol inflation decays over time, how will validators be compensated if more of the fee pool is burned? Supporters argue that a healthier, more valuable SOL – supported by disinflationary pressure – can sustain adequate validator rewards even with lower inflation, thanks to higher token prices and more robust staking demand. Skeptics caution that underestimating the required reward level could impair security if validator numbers or diversity shrink.
Why Disinflation Matters For SOL’s Investment Case
Beyond the purely technical arguments, the debate is fundamentally about SOL’s role as a monetary asset in a competitive Layer‑1 landscape. Many investors now consider fee burns and supply dynamics a core part of a chain’s value accrual thesis. Ethereum’s EIP‑1559, which burns a portion of all transaction fees, created a widely cited narrative of “ultrasound money” when network usage is high enough.
Solana, with its high throughput architecture and low fees, historically has not funneled as much value into the burn. If the network can couple its performance with a more aggressive disinflation mechanism, it may strengthen SOL’s case as an asset that directly benefits from increased adoption, DeFi volume and on‑chain activity.
For long‑term holders, a credible path toward lower net issuance – even if not immediately deflationary – can be attractive. It suggests that as the ecosystem expands, supply growth slows or even reverses, potentially supporting price over longer horizons. At the same time, the chain must avoid “over‑monetizing” usage to the point where developers and users find fees unpredictable or burdensome.
Lessons From The Failed SIMD‑0228 And How This Differs
Last year’s failed SIMD‑0228 vote serves as a cautionary backdrop. That earlier proposal aimed to accelerate disinflation more directly, but it ran into resistance on concerns ranging from validator rewards to the speed and scale of the monetary shift. The defeat underlined how sensitive tokenomics changes can be for a live, large‑scale network.
SIMD‑0457 differs in several key ways:
– It focuses on a structural re‑allocation of fees toward a burn, instead of primarily changing issuance schedules.
– It introduces a resource‑based dimension intended to be more fair and economically aligned than a blunt fee hike.
– It explicitly attempts to shield critical infrastructure actors, such as oracle providers and market makers, from outsized cost increases.
These differences may make it more palatable to stakeholders who opposed SIMD‑0228, though it is far from guaranteed that a consensus will form quickly. The proposal still needs rigorous data‑driven modeling, further discussion among validators and developers, and likely iterations to the parameters before any network‑wide adoption.
What Comes Next For Solana Governance And SOL Tokenomics
The renewed burn debate marks another step in Solana’s ongoing experiment with aligning high‑performance infrastructure with a compelling monetary design. For Yakovenko and other proponents, the path forward involves:
– Stress‑testing the proposal with real transaction data to refine burn estimates
– Simulating different fee and usage scenarios to understand behavioral responses
– Evaluating long‑term validator revenue under decreasing inflation and higher burns
– Communicating clearly with developers and users about expected fee impacts
Whether SIMD‑0457, or a modified version of it, ultimately passes, the core themes are unlikely to fade. As Solana’s DeFi, NFT, RWA and meme‑coin sectors expand, the question of who captures the economic upside – token holders via burns and disinflation, validators via rewards, or ecosystem participants via low fees – will remain central.
For now, Yakovenko’s endorsement signals that Solana’s leadership is willing to revisit tough monetary questions that were left unresolved after last year’s failed vote. The outcome of this debate could shape not only SOL’s long‑term supply curve, but also how the network positions itself against other major smart‑contract platforms in the race to scale blockchains without sacrificing economic sustainability.