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Inflation is not the problem, Hubbard says
Hubbard told crypto.news that inflation of about 4% to 4.5% was "not that extreme" and rejected the view that issuance is the main force holding back SOL's market performance. Calling inflation the problem offers an overly simple explanation for the token's price movements, he said.
Staking rewards also remain inside the Solana economy, Hubbard noted, because SOL issued to stakers is commonly restaked rather than sold immediately. Based on that structure, he argued cutting issuance would not produce an immediate or easily measured change in SOL's price. Galaxy Research raised a related concern before the vote, warning that lower staking rewards could make validator operations less attractive if increased fee income or price appreciation failed to offset the lost revenue, and that frequent changes to economic parameters complicate financial planning for validators and other businesses.
Hubbard's company has direct exposure. SOL Strategies operates Solana validators, provides staking services and manages a SOL treasury, so its earnings can be affected by staking rewards, validator revenue and changes in SOL's value. The vote itself passed narrowly, with 176.29 million SOL in support, equal to 67% of participating stake, against 66.19 million opposed and 20.63 million abstaining, with 60.7% participation.
Dispute over the SGP-0003 tally
Alongside his inflation concerns, Hubbard questioned how Solana officials interpreted the result of SGP-0003, the Resource and Inclusion Fee proposal. The official final tally gave it 53.9% support, with 18.92% against and 27.18% abstaining. Under the formula displayed in Solana's current governance documents, abstentions count toward both quorum and the approval denominator, leaving the proposal below the required two-thirds level.
Hubbard argued the calculation method communicated when voting began treated abstentions differently, helping meet quorum but excluded when calculating the share of decisive votes. Excluding abstentions, SGP-0003 secured approximately 74% of the stake that selected either option, enough to exceed the requirement. He therefore considers the proposal approved under the rules participants were originally given, even though he believes rejection may produce a better practical result.
The Solana Constitution currently states the opposite of Hubbard's interpretation, defining the approval denominator as "For + Against + Abstain." According to Hubbard, applying a different calculation after voting started moved the goalposts for validators and delegators, and procedural integrity required using the rules presented when the ballot opened.
Resource fees could reshape Solana costs
SGP-0003 supported a redesign of transaction charges through SIMD-0553. Solana currently charges a base fee of 5,000 lamports per signature, with half burned and half paid to the block-producing validator. Under the new design, transactions would carry a 2,500-lamport inclusion fee paid to the block producer plus a separate fee based on computing resources requested, with the protocol burning the resource-based portion in full.
Using network activity from May 2026, the proposal's authors estimated daily SOL burns could rise from about 648 to between 1,500 and 1,800 during the first stage, with later stages increasing burn further. For application developers and users, the change would shift costs toward compute-heavy transactions while lowering the base fee for simple transfers.
The governance friction comes at a delicate moment for Solana, with decentralization comparisons drawing renewed attention and tokenomics debates now shaping how the network funds security. Whether the inflation cut delivers measurable price benefits, as Hubbard doubts, or tightens supply as supporters expect, the episode has exposed unresolved questions about how Solana's governance counts votes and communicates its rules to the validators who run the network.
