Kraken Votes No on Both Supply Proposals, Pushing SGP-0002 Below the Threshold

Kraken cast its validator ballot against both SGP-0002 and SGP-0003 at 12:33 UTC on August 28, pushing Solana SOL$104.12-0.5%'s double-disinflation proposal below the two-thirds approval bar it had held throughout the week. With epoch 1024 closing around 15:00 UTC today, fewer than three hours remain for any remaining validator stake to alter the outcome.

Our coverage earlier this morning placed SGP-0002 at 68.77% approval, narrowly above the 66.67% supermajority required to pass, per CoinDesk's reporting based on a morning snapshot. The arithmetic on a 12-million-SOL no vote is unambiguous: with participation sitting near 47.72% of total staked supply, adding Kraken's stake to the against column drops SGP-0002 approval to approximately 65%, below the threshold. SolanaFloor confirmed at 12:49 UTC that both proposals now sit below 66.67% with under three hours remaining.

What SGP-0002 and SGP-0003 Would Do

SGP-0002 ties to SIMD-0550 and doubles Solana's annual disinflation rate from 15% to 30%. It does not cut current staking yields immediately but accelerates the timeline for SOL issuance to reach its 1.5% terminal floor, shifting the arrival date from 2032 to roughly 2029. Over six years, the proposal would remove an estimated 18.9 million SOL from the emissions calendar, per DeFi Development Corp's analysis.

SGP-0003 operates differently. Under SIMD-0553, transactions would be charged for the compute resources they actually reserve, with a portion of that fee destroyed. Per CoinDesk's reporting, daily burns currently run around 650 SOL; the proposal would lift that to 7,500–9,000 SOL under typical network load, a 12 to 14-fold increase worth approximately $800,000 a day at current prices. Even at that pace, new SOL issuance would still exceed daily burns by several multiples.

Neither proposal is itself a protocol change. An approved SGP is a mandate; the technical implementation must still be authored and activated separately.

SGP-0003 had already failed the approval threshold before Kraken's vote, sitting at 62.72% support with 20.75% of participating stake abstaining, per CoinDesk's morning data snapshot. Because abstentions count toward participation quorum but not toward approval, they created a structural disadvantage for SGP-0003: validators who neither supported nor opposed the proposal still made it harder to pass. For a deeper look at what SGP-0003's fee structure would cost specific protocols, our earlier simulation coverage quantified the exposure for DeFi routers and CLOB market makers.

Why Custodial Stakers Voted No

Custodial exchanges earn yield from new token issuance. Faster disinflation means lower APY sooner, which compresses that revenue. The calculation differs somewhat from a long-term SOL holder's view: an exchange staking on behalf of users optimizes for yield, not for what a supply schedule reduction might do to the asset's price over years.

Mert Mumtaz, CEO of Helius hSOL$124.27+0.0% and a co-author of both proposals, laid out the counter-argument in an X post at 11:42 UTC, posted before Kraken's ballot landed. He argued that voting no to preserve marginal inflation revenue is "mathematically nonsense" unless a validator genuinely believes that slower supply growth has essentially no effect on SOL's valuation. The implication: any upward price impact from reduced issuance, even modest, would far outweigh the saved APY.

Armani Ferrante, CEO of Backpack, described the Kraken vote as unsurprising when the DegenerateNews report broke at 12:33 UTC.

Who Else Has Voted Against

Kraken is not alone. Solana Company, the Nasdaq-listed SOL treasury firm trading as HSDT, announced on August 21 that it was supporting the Solana Constitution while opposing both SGP-0002 and SGP-0003 "on grounds of timing, not intent." Its stated reasoning: institutional investors model multi-year projections based on stable economic parameters, and reopening the inflation schedule introduces uncertainty. Figment, Everstake, and P2P Validator are also among the major custodial stakers who have voted against at least SGP-0002, according to the governance page.

SGP-0001, the Solana Constitution that establishes the governance framework itself, has 95.35% support per the same governance page, and is not in doubt.

What Failure Would Mean, and What Comes Next

If SGP-0002 closes below 66.67%, the disinflation rate stays at 15% annually and the 1.5% issuance floor arrives on the 2032 schedule. No supply mechanics change. SGP-0003 failure leaves daily burns around 650 SOL, and the estimated $800,000 daily burn rate remains theoretical.

Both proposals could be resubmitted under the same governance process. The SGP system imposes no cooling-off period between submissions, but the proponents would need to build support across custodial stakers who've now declared their economic objection publicly.

One path still open in the next three hours: under the Solana Constitution that SGP-0001 establishes, delegators can override their validator's vote with their own. Retail SOL holders staked at Kraken's validators who support the proposals could cast independent yes votes before epoch 1024 closes.

The final tally will be on-chain at approximately 15:00 UTC.