Solana SIMD-0550 and SIMD-0553: How the network aims to slash SOL supply, and the Galaxy Research reality check

The proposal was authored by Temporal's "cavemanloverboy," the same engineer behind a 100k-TPS stress test on Solana mainnet.

SIMD-0550: Accelerated disinflation

SIMD-0550 doubles Solana's annual disinflation rate from 15% to 30%, halving the time to reach the terminal inflation floor of 1.5%. The terminal floor would be reached by 2029 instead of 2032.

The net effect removes an estimated 18.9 million SOL of future emissions compared to the current schedule. The proposal was authored by Helius engineers "lostintime101" and "0xIchigo."

Governance status: SGP-0003 bundles both into a formal vote

The two SIMDs are combined into a single governance vote called SGP-0003 (Signaling Governance Proposal 3).

• Signaling threshold: Proposals need validator support representing 15% of active stake (65.16 million SOL, ~$4.7B) to advance to a formal stake-weighted vote.
• Milestone: The threshold was passed on August 5, 2026, when Helius validators supplied the final stake weight, triggering an 11-epoch formal voting window.
• Current status (as of Aug 8): The formal vote is underway with approximately 10 days remaining.
• Key backers: Helius (provided the decisive validator stake), Blueshift, and Temporal Emerald are the leading named validators backing the proposal. Jupiter was listed among supporters during the signaling phase.
• Voting deadline: The signaling window closes August 18, 2026.

Ethereum's EIP-8361: Tapered issuance burn

EIP-8361 proposes a "Tapered Issuance Burn," published August 4, 2026, by six researchers including Ethereum Foundation's Justin Drake. At each epoch boundary, the network deducts and burns a fraction of every validator's idealized duty reward. The burn fraction rises with the staking ratio, reaching zero net consensus-layer issuance at ~50% of ETH supply staked (a fixed saturation balance of ~60.25 million ETH).

A key detail: this targets only consensus-layer (CL) issuance, not execution-layer tips or MEV — so stakers would still earn from those sources even at zero nominal issuance.

Status: This is a draft EIP published for discussion; no formal validator vote has been scheduled. Galaxy Research reports that the proposal faces 99.77% validator opposition on early polling, making adoption unlikely in its current form.

Galaxy Research: Demand, not supply, is the binding constraint

Galaxy Research (Vice President Lucas Tcheyan) published an analysis on August 7-8, 2026 arguing that supply-side adjustments alone will not meaningfully reprice ETH or SOL. Key points:

• Ethereum: EIP-8361's supply-side hopes are "quashed by 99.77% validator opposition," shifting the focus back to demand as the price driver.
• Solana: The SIMD-0553 burn mechanism may create short-term hype, but daily inflation still mutes any deflationary impact — the network currently issues ~25,000-30,000 SOL/day in staking rewards, far exceeding even the proposed 7,500-9,000 SOL/day burn.
• Core thesis: The fundamental question both networks face is "how much security budget is required," and adjusting issuance parameters is a second-order effect relative to whether onchain activity (demand for blockspace) generates enough fee revenue. The healthier long-term state is one where validating becomes a "thin-margin utility attached to a profitable onchain economy" rather than relying on inflation subsidies.

The bottom line

Both chains are attempting significant supply-side adjustments. Solana's proposals are further along in governance, with a formal vote underway. Ethereum's EIP-8361 is a draft facing overwhelming validator opposition. According to Galaxy Research, neither chain's supply-side fix addresses the binding constraint — whether real user demand for blockspace can sustain network security budgets without relying on inflation. Supply cuts help at the margin, but do not substitute for organic fee revenue growth.