Solana nears best month since 2024 as governance vote approaches

Solana is nearing its best month since 2024 as validators vote on three governance proposals. SOL rose more than 8% in the past 24 hours. SOL is up roughly 44% since August began. SOL moved above $105 for the first time since January. Voting ends around 15:30 UTC today when epoch 1023 ends. Epoch 1023 is a roughly two-to-three-day period of network activity. The proposals use Solana Governance Proposals, an on-chain system that gives validators and SOL delegators binding, stake-weighted votes for the first time. One proposal would ratify a Solana Constitution that formalizes the voting process. SIMD-550 would increase Solana's annual disinflation rate from 15% to 30%. The proposal would move Solana to its 1.5% inflation floor by 2029 instead of 2032. The change would result in roughly 18.9 million fewer SOL being created over the next six years. A 21Shares analysis estimates that staking yield would fall from around 5.25% today to about 2.25% within three years. Some smaller validators could become unprofitable. SIMD-553 would change Solana's transaction fee structure. The proposal would keep a base inclusion fee for validators. It would destroy a new resource fee based on the computing power used by each transaction. The change could increase Solana's daily burn from about 650 SOL to as much as 9,000 SOL. The current daily burn is worth roughly $48,000. The potential daily burn is worth around $668,000. The increase would be 12 to 14 times larger depending on network activity. Anza and Firedancer completed code review of SIMD-553 on July 20. The vote determines whether the proposal activates. The vote does not determine whether the proposal is ready. Nasdaq-listed treasury firm Solana Company, which trades as HSDT, supports the constitution. Solana Company is voting against both tokenomics proposals. Management said the objection concerns timing rather than the proposals' goals. Management said predictable yield currently matters more to institutional stakers than a faster reduction in issuance. Each tokenomics proposal requires a two-thirds supermajority of participating stake. Validators vote on the proposals independently. Rejecting one proposal would not block the other. Traders appear to have priced in a possible supply squeeze before the vote became official. SOL's 14-day RSI is near 84.5. The RSI is a momentum gauge, and readings above 70 typically indicate overbought conditions. Vote results are expected within hours after epoch 1023 ends.