21Shares: Solana's two governance proposals aim to reduce staking rewards and enhance SOL scarcity

The 21Shares report shows that Solana is advancing two governance proposals, SIMD-550 and SIMD-553, which may significantly change the SOL holding economic model in the next two years.

SIMD-550 proposes to increase Solana's annual inflation reduction rate from 15% to 30%, allowing it to reach a terminal inflation rate of 1.5% more quickly, with nominal staking yields expected to drop to about 2.25% within three years.

SIMD-553 was approved and merged on July 20, and will introduce a destruction fee for compute unit requests, increasing the daily SOL burn amount from about 600-800 to about 7500-9000.

The report believes that although the decline in staking income will directly affect the earnings of validators and stakers, a lower issuance combined with a higher burn rate may improve the long-term supply and demand structure of SOL, and could drive some capital towards the decentralized finance ecosystem on the Solana chain.