Solana Inflation Vote Tightens as Kraken Flips Support

Solana’s closely watched governance vote on a major inflation reform has entered its final stretch after crypto exchange Kraken reversed its position and backed the proposal following strong pressure from the Solana community.

The proposal, known as SGP-0002 or “Double Disinflation,” is part of Solana’s first on-chain governance vote focused on tokenomics reform. It seeks to double the network’s annual disinflation rate from 15% to 30%, potentially reducing future SOL issuance by about 18.9 million tokens, valued at roughly $1.5 billion.

If approved, the change would allow Solana to reach its terminal inflation rate of 1.5% as early as 2029. Supporters argue that lower SOL issuance could reduce dilution and tighten long-term token supply, potentially benefiting investors if demand remains strong.

Kraken initially opposed SGP-0002 alongside major staking operators including Figment, Everstake and P2P.org. Kraken controls a pool of approximately 8.92 million SOL, making its position significant in the governance battle. The opposition was widely interpreted as an effort to protect staking yields.

However, criticism from retail participants and prominent Solana community figures intensified. Helius CEO Mert Mumtaz was among those publicly challenging the opposition. Kraken subsequently switched its vote from “NO” to “YES,” giving the inflation reform additional support.

Despite the reversal, SGP-0002 remains short of approval. Turnout has reached 60.17%, comfortably exceeding the required one-third quorum. Around 65.15% of votes, representing 169.91 million SOL, currently support the proposal.

The measure needs a two-thirds majority, or 66.67%, meaning supporters remain roughly 1.52 percentage points short. About 25.39%, representing 66.22 million SOL, oppose the proposal, while 9.47%, or 24.69 million SOL, have abstained.

Meanwhile, the related SGP-0003 proposal, which sought to significantly increase daily transaction-fee burns, has effectively failed after widespread validator abstentions.

Even if SGP-0002 passes, Solana’s inflation changes will not begin immediately. Implementation requires the SIMD-0550 technical upgrade, with validator coordination and deployment expected to take at least 4.5 months.