Author: Xiaobing
The outcome of Solana's first-ever network-wide governance vote looked very much like an election night.
With 70 minutes left before the voting deadline, the approval rating for SGP-0002 (Double Disinflation) was below the passing threshold, with the opposition leading by approximately 58 million SOL. The Kraken-affiliated validator "Kraken 2" had switched from support to opposition hours earlier, directly pulling the approval rate below the two-thirds threshold. Helius CEO Mert Mumtaz started making frantic phone calls; according to his own account on X, he made about 500 calls in the final hours.
Then, Kraken flipped back.
Galaxy Digital also switched from abstention to support. JitoSOL holders used the "Staker Override" mechanism to bypass validators voting against the proposal and directly cast their own staking weight in favor.
At the end of epoch 1024, SGP-0002 passed with a 67.001% approval rate, just 0.334 percentage points above the 66.667% passing threshold. Approximately 176 million SOL voted in favor, about 66.19 million opposed, and about 20.63 million abstained. 1,326 validators participated, accounting for 60.7% of eligible stake.
This was the first real-world test of Solana's new on-chain governance system (launched this July). The monetary policy of a network valued at over $60 billion was flipped by a single exchange's validator in the final minute.
What Did the Vote Change?
The content of SGP-0002 is not complicated in itself.
Solana's current inflation rate decreases annually at a rate of 15%. This proposal doubles the rate of decrease to 30%, bringing the terminal inflation rate of 1.5% forward by about three years, expected to be reached around 2029 instead of the original 2032.
The specific impact is that over the next six years, the Solana network will issue approximately 18.9 million fewer SOL than originally planned, roughly equivalent to 2.6% of the current supply. At current prices, this "unissued" SOL is worth about $2 billion.
This is not an immediate supply shock. The inflation rate will not be halved overnight; it will simply decline faster each year. Estimates from 21Shares suggest that staking yields could drop from about 5.25% to about 2.25% within three years. For smaller validators reliant on staking rewards, this represents a real economic pressure.
The opposition's logic is not absurd.
Everstake (which voted against with about 7.96 million SOL) stated that they are not opposed to the direction of lowering inflation but question the speed of change and its disproportionate impact on smaller validators. Figment cast about 17.07 million SOL in opposition, being the largest opposing entity.
The background of the proposal is also noteworthy. In March 2025, a similar proposal, SIMD-0228, failed to reach the two-thirds threshold with about 61% support. Small validators mobilized collectively in the late stages of voting, blocking its passage. SIMD-0411 met the same fate in late 2025 and early 2026.
SGP-0002 was the third attempt, designed with a more conservative approach (a fixed reduction rate rather than a dynamic inflation model), and finally passed, albeit narrowly.
Kraken's 8.9 Million SOL
What turned this vote from a "policy debate" into a "political thriller" was the maneuvering in the final hours.
"Kraken 2" is a validator associated with the exchange Kraken, holding about 8.9 million SOL in stake, representing about 2% of total voting power. This validator first voted in favor, then switched to opposition a few hours before the deadline, directly pulling the approval rate below 66.67%.
Protos conducted a counterfactual calculation: if Kraken's votes had remained opposed, SGP-0002's final approval rate would have been about 63.9%, far below the passing threshold. The change of vote by a single validator determined the token issuance curve for the entire network over the next six years.
Kraken co-CEO Arjun Sethi wrote a meaningful line in response: "custodians should be conduits, not voices."
Solana's governance framework (SGP-0001) designed a "staker sovereignty" mechanism for this purpose: users who delegate their stake can override the validator's vote, using their own staking weight to express an independent opinion. JitoSOL holders exercised this right in the final stages. Analyst Brian Smith pointed out on X that without JitoSOL holders overriding the validator's position, SGP-0002 would also have failed.
The existence of this mechanism proves the foresight in Solana's governance design. But the fact that it was used for the first time on a large scale in a scenario where it was necessary to "reverse the validator's will" for a proposal to pass is itself worthy of reflection.
One Passed, One Didn't
Three proposals were voted on simultaneously. SGP-0001 (Solana Constitution) passed easily with 85.97% support, establishing the rules framework for future governance, including proposal processes, voting weights, and passing thresholds. Staking at least 100,000 SOL is required to submit a proposal.
SGP-0003 (Resource and Inclusion Fee), however, failed to pass, with only 53.9% support, nearly 13 percentage points short of the two-thirds threshold. This proposal planned to split Solana's current fixed signature fee into two parts: a fixed 2500 lamport inclusion fee (paid to the block producer), plus a fee calculated based on computational resources (100% burned). If passed, up to 9,000 SOL could be burned daily.
The failure of SGP-0003 is equally significant.
It means the Solana community is willing to accept "issuing less SOL" (supply-side reform) but is not yet ready to substantially change the fee structure (revenue-side reform). Validators' economic interests diverged on the two proposals: reducing inflation benefits large validators holding significant amounts of SOL, but changing fee distribution directly affects block production revenue.
Helius drafted the underlying technical proposals for both SGP-0002 and SGP-0003 (SIMD-0550 and SIMD-0553). With one proposal in and one out, Mumtaz publicly requested Solana co-founder Anatoly Yakovenko to help mobilize remaining validators when pushing for SGP-0003, but ultimately failed to gather enough votes.
Vote Passing Does Not Equal Implementation
SGP-0002 is currently a governance mandate, not an automatically executed protocol change.
Technical implementation requires SIMD-0550 to complete an independent development process: client teams need to write code, adding a feature gate called `double_disinflation_rate`, for validators to activate on the mainnet. As of publication, SIMD-0550 is still in "Review" status in the Solana Foundation's improvement documentation repository.
There is still considerable distance between authorization and deployment.
If client implementation proceeds smoothly, all parties agree on the arithmetic logic, and the feature gate is activated without controversy, SGP-0002 will become a landmark event for Solana moving towards active monetary policy management. If the implementation process encounters obstacles or reignites disputes, this passing result by 0.334 percentage points will be difficult to regard as a true consensus.
Solana Company (the entity renamed from Solana Labs) voted against both SGP-0002 and SGP-0003 in this vote. This detail is often overlooked. The network's core development company opposed a governance proposal that passed, and the governance proposal still passed. This is not common in blockchain governance history, and the signaling effect for decentralization is surprisingly positive.
However, the problems exposed during the voting process are equally real: the ambiguous ownership of voting rights for exchange-held stakes, large validators' last-minute vote changes determining the outcome, and intensive phone lobbying by proposal proponents resembling whip operations in traditional politics.
Solana has just completed the most serious on-chain monetary policy democracy experiment in the crypto space. The experimental results show that democracy is always messier than imagined, but also more vital.
