Solana (SOL) is preparing to tighten the flow of new tokens entering circulation while destroying a larger share of the fees users pay to transact. According to a report from SolanaFloor publ
Solana (SOL) is preparing to tighten the flow of new tokens entering circulation while destroying a larger share of the fees users pay to transact.
According to a report from SolanaFloor published on Aug. 3, two related proposals are set to go to an initial vote later that day.
The measures deal with how quickly new SOL, the Solana network's native token, is created, and how much of each transaction fee is permanently removed, or "burned," from supply.
Burning a token means sending it to an unusable address so it can never be spent again, which permanently reduces the total supply.
Related: SBI Holdings teams up with Solana on a new onchain market in Japan
Solana is a decentralized, public blockchain network that records transactions and runs applications without a central authority. It is known for fast, low-cost transactions, which has made it a popular home for crypto trading, payments, and tokenized real-world assets.
Its native token, SOL, is used to pay network fees and reward the participants who help secure the network.
If both proposals pass, Solana's annual inflation reduction rate would rise to 30%. Inflation reduction here refers to the pace at which the network slows the creation of new tokens each year, a higher rate means issuance tapers off faster. The change would cut new SOL issuance by roughly $1.36 billion over the next six years compared with the current schedule.
The proposals would also lift the amount of SOL burned each day. Average daily burns are projected to climb to about 9,000 tokens, up from roughly 650 now. Burning permanently takes tokens out of circulation, so a higher burn rate steadily shrinks the available supply.
Taken together, the two changes pull in the same direction: fewer new tokens created and more existing tokens destroyed. The report notes that this combination would help ease supply pressure on SOL by tightening how many tokens are available over time.
The outcome of the initial vote will determine whether the proposals advance further through Solana's governance process.
Related: Solana's tokenized asset volume hits $5.8 billion in a record quarter
