Key Takeaways:
Solana validator priority fee increased from 50% to 100%
The community is divided over possible token inflation caused by fee changes
The SOL price reacted positively to the news, rising by 5.56%


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LUKNOW (CoinChapter.com) - The Solana community has approved a governance proposal to allocate 1,001 TP3T in priority fees to validators. According to on-chain governance data published on May 27, the proposal, called SIMD-0096, passed with 771 TP3T in favor.


source:
X
Validators are crucial players in the Solana blockchain network. They run the software to confirm transactions and maintain the security of the network. Priority fees, on the other hand, are additional fees that users can pay to have their transactions processed faster when the network is congested.
The previous 50/50 split encouraged "sideline trading"
Previously, the network divided the priority fee into 50% to be burned (removed from circulation) and another 50% to be allocated to validators. However, the creator of the proposal, tao-stones, believed that this would encourage validators to engage in opaque "sideline transactions" with users to obtain more fees.
Allocating 100% priority fees to validators ensures they focus on maintaining network performance and security. Supporters believe the change will reduce potential "sideline transactions" and improve efficiency.
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Solana Community Divided on Inflation
Although the proposal was approved, it also sparked a debate within the Solana community. Some members, including validators such as Stakewiz, raised concerns about the possible inflationary effects of introducing more SOL tokens into circulation without burning any fees. Stakewiz estimated that this change could increase the issuance of SOL by 4.6%, thus triggering inflation.


source:
X
One of the opponents of the proposal also stated:
However, others in the community supported the proposal, arguing that it would eliminate opaque “side-trading” and make the fee structure more transparent and fair to users.


source:
X
Incremental implementation and further improvements
Implementation of SIMD-0096 is not immediate, as it requires subsequent software releases (such as Solana’s 1.17 and 1.18 releases) to integrate the necessary changes. This delay provides an opportunity for further development and integration of a more comprehensive fee distribution system, as proposed in SIMD-0123.
Solana co-founder Anatoly Yakovenko said the update could make it possible for staking pools with programmatically frozen tokens to receive all priority fees and tips. He also said such a mechanism would take "six months to a year" to be operational.


source:
X
SOL price reacts positively
In the context of this development, the Solana (SOL) token has experienced a bullish price action. As of writing, SOL is trading at $168.9, up 5.56% from its lowest point of the day.


SOL/USD 1-day price chart. Source: TradingView
SOL’s market capitalization and 24-hour trading volume also increased by 5.59% and 9.47% respectively.