Author: Gu Yu
Solana is undergoing a landmark governance experiment.
On August 23rd, Solana's first formal on-chain governance vote was initiated, with three proposals—SGP-0001, SGP-0002, and SGP-0003—entering the voting phase simultaneously. Their contents concern the governance framework, SOL inflation mechanism, and transaction fee structure, respectively.
This not only signifies that Solana has begun entrusting major decisions to validators and stakers but also indicates that network upgrades, previously coordinated mainly by core developers and ecosystem institutions, are now entering a stage of public contention.
Around 23:00 tonight, the voting for these three governance proposals officially concluded. Proposals SGP-0001 and SGP-0002 both reached the minimum quorum (the proportion of all staked SOL users voting) of one-third and the minimum approval threshold (the proportion of 'yes' votes among all votes cast) of two-thirds and will now formally move to the implementation stage.
However, SGP-0003, which involved a network fee restructuring, was not passed. Its approval rate was 54.3%, still some distance from the 66.6% minimum threshold. Furthermore, the list of opposing votes included a series of well-known projects such as Jupiter, Forward Industries, Anagram Staking, and Solana Company.
So, what do SGP-0001 and SGP-0002 mean for the Solana ecosystem? And why did SGP-0003 face significant controversy on social media and fail to pass?
SGP-0001: Establishing a Formal Governance Framework for the First Time
Previously, Solana lacked a set of clear, standardized on-chain governance procedures similar to Ethereum's governance system. The traditional SIMDs addressed more "how to implement technically," while the newly introduced SGPs attempt to answer another question—whether Solana should move in this direction.
SGP-0001, the "Solana Constitution," is precisely the institutional foundation for this governance mechanism.
According to this framework, any proposal receiving support from at least 15% of active staking can enter formal on-chain voting; voting is weighted by the amount of staked SOL, with validators expressing opinions by default, but stakers can override validator votes using their own staking accounts. To pass a proposal, at least one-third of the network's staked SOL must participate, and at least two-thirds of the participating stake must vote in favor.
Therefore, the significance of SGP-0001 does not lie in changing Solana's performance or token economics but in providing a formal procedure for future controversies.
SGP-0002: Ending the Inflation Reduction Cycle Three Years Early
If SGP-0001 is about institutional construction, then SGP-0002 and SGP-0003 directly touch upon SOL's monetary economic model.
SGP-0002, "Double Disinflation," proposes increasing Solana's current annual inflation reduction rate from 15% to 30%, while not changing the ultimate inflation floor of 1.5%.
The difference lies in the time to reach this endpoint.
According to proposal estimates, Solana would originally have taken approximately 5.7 years to gradually reach the terminal inflation rate of 1.5%. The new plan shortens this time to about 2.8 years, projected to reduce cumulative new issuance by approximately 18.9 million SOL over the next six years.
Supporters believe this is equivalent to accelerating SOL's transition from an early network model of "high inflation, high staking subsidies" to a mature asset model. SOL treasury company Forward Industries argued that reducing new issuance can lessen selling pressure from staking rewards and reduce dilution for long-term holders; the company estimated that 18.9 million SOL, at its price at the time, corresponded to a potential reduction in issuance worth about $1.795 billion.
However, opposition voices were equally direct. For validators, inflation rewards are a significant source of income. The new plan does not magically create new network revenue but reduces future issuance, meaning a decrease in the SOL rewards that validators and stakers can obtain.
This is also a continuation of the SIMD-0228 controversy from 2025 on Solana. A similar inflation reform previously failed despite receiving over 60% support because it did not meet the supermajority threshold.
SGP-0003: The Proposal That Truly Changes Solana's Economic Model
Compared to SGP-0002, SGP-0003 was more controversial because it changes not just SOL issuance but the entire network's pricing model for "block space."
Solana's current base transaction fee primarily charges a fixed fee based on the number of signatures. SGP-0003 proposes splitting it into two parts:
One part is a fixed 2500 Lamports Base Inclusion Fee, paid entirely to the block producer;
The other part is a Resource Fee calculated based on the resources requested by the transaction, with 100% of this fee being burned.
Its core concept is very simple: whoever consumes more network resources pays more.
Currently, Solana burns approximately 648 SOL daily through base fees. Supporters of SGP-0003 believe the new mechanism could increase this number to several thousand SOL per day, with some estimates ranging from 7,500 to 9,000 SOL/day, implying a possible increase in daily burn by about tenfold.
For SOL holders, this seems like an almost natural boon: reducing new issuance on one hand while increasing network burn on the other, significantly slowing the growth rate of SOL supply.
But the problem lies precisely here—the fees don't materialize from thin air. The new fees ultimately fall on traders, applications, and on-chain markets.
Mostly Data simulated different types of applications, finding that ordinary transfers are minimally affected, but complex applications like account creation, CLOB market making, and on-chain routing would bear more noticeable cost increases. For trading protocols like Jupiter, Titan, and DFlow, the average fee per transaction might increase by approximately 0.000068, 0.00010, and 0.00012 SOL, respectively.
Thus, a rare ideological conflict emerged within Solana.
The Biggest Controversy: Is This "Resource Pricing" or a Tax on Applications?
Supporters of SGP-0003 believe Solana's current fee model severely underestimates the network resource consumption of complex transactions.
SGP-0003's proposer, developer Cavey, even publicly admitted this is a "positional proposal."
His goal is not to maintain Solana as a completely neutral general-purpose computing platform but to steer it toward becoming a blockchain more focused on financial markets. For financial applications, fast confirmation, stable execution, censorship resistance, and predictable resource pricing are more important than "any application must be cheap enough."
Solana co-founder Anatoly Yakovenko also supports this direction. He believes the current fixed signature fee for transactions leads to almost identical base costs for transactions of vastly different scales. A transaction consuming only 5,000 CU versus a large transaction consuming 1.4 million CU have an unreasonable price difference under a fixed fee model, so repricing based on CU addresses a real problem.
However, application developers do not accept this explanation.
Ellipsis Labs CEO Eugene Chen was one of the strongest critics. He argued that SGP-0003 is essentially a highly subjective policy disguised as a neutral resource pricing mechanism.
In his view, if an application platform's core economic parameters can suddenly change due to a governance vote, it becomes difficult for application developers to build long-term businesses on it.
He even bluntly stated that SGP-0003 is a "middle finger to every micro-structure-sensitive application on Solana" because it signals to developers that the cost model acceptable today could be completely rewritten tomorrow by a governance vote.
Manifest also expressed clear opposition. The project noted that Solana's truly scarce resource is priority ordering within a block, which is already priced via priority fees. In contrast, a large amount of available block space is not truly scarce yet would be charged extra under SGP-0003.
Manifest further warned that excessively high resource fees could even backfire: to lower CU costs, developers might be forced to reduce on-chain security checks, thereby increasing security risks.
On-chain voting records show Jupiter, Drift, Forward Industries, and Anagram Staking voted against the 0003 proposal; major staking providers like Figment, Staking Facilities, Kiln, and P2P.org explicitly expressed support, while Everstake directly abstained.
Conclusion
From technical progress to market performance, Solana is in a clear expansion phase.
In July, Solana increased the single-block compute limit from 60 million CU to 100 million CU, continuing to release space for higher on-chain transaction density; in August, mainnet Slot time was further shortened to 350ms, with plans to advance toward 200ms. Firedancer is already running on the mainnet, and next-generation consensus upgrades like Alpenglow are also progressing. Meanwhile, financial applications such as RWA, stablecoin payments, and tokenized stocks are expanding, as Solana attempts to translate its high-performance advantage into larger-scale real economic activity.
SOL's price also experienced a rapid rebound, rising from around $75 in August to above $110 at one point. Under the combined effects of technical upgrades, ecosystem expansion, and market expectations, Solana seems to be regaining market pricing for its next growth phase.
But what this first governance vote exposed is another side.
A faster, higher-capacity network does not mean all participants will benefit equally. The passage of SGP-0002 indicates a certain consensus has formed around reducing SOL's long-term inflation; the failure of SGP-0003 to gain sufficient support shows application developers remain highly vigilant about sudden cost increases and the redefinition of economic rules.
This actually represents Solana's most realistic current contradiction: it is striving to become more robust financial infrastructure but has not fully resolved how that infrastructure should be priced.
In the past, Solana's competitive logic was relatively simple—lower fees, higher performance, stronger throughput; but as the chain begins to carry more transactions, market making, payments, and RWA businesses, "low cost" itself is no longer just a user experience feature and starts directly impacting application business models.
Therefore, the true legacy of this first round of governance is not the outcome of any single proposal but a clearer dividing line: Solana can no longer rely solely on its technical roadmap to drive network growth; it must now find a new balance between developer interests, validator revenue, SOL holder value, and long-term network sustainability.
When a public chain transitions from "pursuing performance" to "hosting an economy," governance ceases to be an ancillary mechanism and becomes competitiveness itself. Solana's first governance round may be just the beginning of this contest.
