Bitcoin, Ethereum, and Solana are simultaneously debating proposals to alter their monetary issuance policies in August 2026. Bitcoin's BIP-110 seeks to restrict non-financial data from blocks, indirectly affecting fee economics. Ethereum's EIP-8361 would burn an increasing share of validator rew...
"Unfortunately this proposal doesn't achieve the outcome it tries to achieve and is actually hurtful for Ethereum." — Stani Kulechov, Founder & CEO, Aave
Bitcoin, Ethereum, and Solana are simultaneously debating proposals to alter their monetary issuance policies in August 2026. Bitcoin's BIP-110 seeks to restrict non-financial data from blocks, indirectly affecting fee economics. Ethereum's EIP-8361 would burn an increasing share of validator rewards as staking participation rises, cutting yields by an estimated 54%. Solana's paired SIMD-0550 and SIMD-0553 proposals aim to double the disinflation rate and increase daily SOL burns by roughly 14x.
The three proposals differ in mechanism — data restriction, reward burn curve, and accelerated disinflation — but converge on the same question: who controls a protocol's economic policy, and at what cost to existing participants. As of August 5, 2026, BIP-110 has effectively failed with miner support below 3%, Solana's proposals have cleared the 15% signaling threshold and move toward a formal vote, and Ethereum's EIP-8361 remains a draft with no inclusion timeline. Together, these simultaneous governance events offer a cross-chain stress test of how decentralized networks make binding economic decisions.
BIP-110, titled "Reduced Data Temporary Softfork," proposes a one-year soft fork restricting non-financial data in Bitcoin transactions. The proposal caps transaction output data at 34 bytes and limits OP_RETURN usage to 83 bytes, targeting the inscriptions, tokens, and arbitrary payloads generated by Ordinals, BRC-20, and Runes protocols. Activation was projected for block 965,664, approximately September 6, 2026, with the rules designed to expire automatically after roughly one year.
The mandatory signaling phase began near block height 961,632, estimated between August 7 and August 15. The proposal requires 55% of miners — 1,109 out of 2,016 blocks — to signal support for early lock-in.
As of late July 2026, miner support stood between 2.64% and 0.3%, depending on the measurement window. Bitcoin developer Luke Dashjr, credited for the original draft and technical input alongside pseudonymous author Dathon Ohm, has refused to withdraw the proposal despite near-zero signaling. Foundry USA, the largest U.S. mining pool, asked miners to vote on BIP-110 support but did not endorse the proposal itself.
The economic context: Bitcoin's current block subsidy is 3.125 BTC, yielding approximately 450 BTC per day and an annual inflation rate of roughly 0.84%. Over 95% of Bitcoin's 21 million supply cap has been mined, with fewer than 987,000 BTC remaining. BIP-110 does not directly alter issuance, but by restricting data-heavy transactions, it would reduce fee revenue from non-financial use cases — a revenue stream that comprised a significant portion of miner income during the 2023-2024 Ordinals peak.
The proposal has effectively failed to reach activation, but the governance debate it surfaced remains significant. According to CoinDesk, BIP-110 "sparked a fight over who gets to decide the future of Bitcoin," revealing a fundamental disagreement about whether block space should remain open to anyone willing to pay fees or be restricted to financial transactions.
Six authors, including Ethereum Foundation researcher Justin Drake, published draft EIP-8361 on August 4, 2026. Titled "Tapered Issuance Burn," the proposal would burn a rising share of validator consensus rewards as the staking ratio climbs, reaching 100% burn at a fixed saturation balance of 60.25 million ETH — roughly half the current circulating supply.
The current state of Ethereum staking provides the backdrop. As of August 4, 2026, 41.41 million ETH is staked, representing 33.98% of circulating supply — an all-time high. The active validator count has declined to approximately 880,000, down from a peak of about 1.09 million in July 2025. The 7-day staking APR has compressed to 2.66%, down from 5.06% in June 2023.
Under EIP-8361, the burn fraction would scale with the staking ratio raised to the power of 1.5. At current staking levels (33.98%), validators' effective yield would drop from approximately 2.6% to roughly 1.2% — a 54% reduction phased in over 18 months. At 50% staked, rewards would approach zero.
The DeFi implications are substantial. According to CryptoSlate analysis, if borrowing costs for WETH remain above the compressed staking yield, the leveraged staking loop — a strategy used extensively across Aave, Compound, and restaking protocols — becomes structurally unprofitable. Under the proposal, "the only reason to borrow ETH ironically would be to short it," as Aave founder Kulechov argued in his August 4 critique.
Kulechov's objection centers on predictability: capping rewards at zero once staking exceeds 50% of supply would render staking yields unpredictable for both institutional participants and solo stakers, undermining Ethereum's appeal as a yield-bearing asset. He contended that Ethereum "should not be punished for growth" in staking participation.
As of August 5, no pull request has been filed to formally propose EIP-8361 for inclusion in the Hegotá hard fork, planned for late 2026 or early 2027. The proposal's path forward remains unresolved, but the debate it triggered regarding Ethereum's monetary policy and the DeFi yield stack built on top of it has already forced protocol teams to model scenarios.
Solana's governance system, Solana Governance Proposals (SGPs), went live on July 2, 2026, requiring 100,000 SOL staked to open proposals and a 15% stake threshold to advance to formal vote. Two linked proposals, bundled as SGP-0003, represent the system's first major test.
SIMD-0550 would double the annual disinflation rate from 15% to 30%, pulling Solana's 1.5% terminal inflation target forward to 2029 from 2032. The proposal would eliminate an estimated 18.9 million SOL in future emissions — worth approximately $1.39 billion at the August 5 SOL price of approximately $73.
SIMD-0553 would introduce resource-based transaction fees calibrated to actual compute, storage, and bandwidth consumption. According to CoinDesk, this would lift daily SOL burns from approximately 650 SOL (~$47,000) to between 7,500 and 9,000 SOL (~$550,000–$650,000) — a roughly 14x increase.
Current Solana network economics: approximately 432.65 million SOL is staked, representing roughly 71–75% of circulating supply. The current inflation rate is approximately 3.8%, down from an initial 8% under the existing 15%-per-year disinflation schedule.
As of August 5, the proposals have cleared the 15% signaling threshold with 65.22 million SOL in stake support. The formal vote deadline is August 18. DeFi Development Corp. (Nasdaq: DFDV), a publicly traded SOL accumulator, announced support on August 4. CEO Joseph Onorati stated the proposals "represent meaningful steps toward a stronger and more sustainable economic model for Solana."
The combined effect of both proposals, if passed, would reduce SOL's net new supply growth through two mechanisms simultaneously: slower emission (SIMD-0550) and faster destruction (SIMD-0553). Unlike BIP-110 or EIP-8361, the Solana proposals have demonstrated concrete validator support and operate through a recently formalized on-chain governance process.
| Dimension | Bitcoin (BIP-110) | Ethereum (EIP-8361) | Solana (SIMD-0550/0553) | |---|---|---|---| | Proposal type | Soft fork (temporary) | Consensus-layer change | Parameter change | | What it alters | Blockspace eligibility | Validator reward curve | Inflation schedule + fee structure | | Activation mechanism | Miner signaling (55% threshold) | Core dev inclusion + hard fork | On-chain stake-weighted vote (15% threshold) | | Current support | <3% miner signaling | Draft only, no inclusion path | 65.22M SOL signaled (threshold cleared) | | Decision timeline | Aug 7–15 mandatory window | No timeline set | Formal vote by Aug 18 | | Reversibility | Auto-expires after ~1 year | Permanent unless reversed by fork | Permanent parameter change | | Primary opposition | Ordinals/Runes ecosystem | DeFi protocols (Aave) | Smaller validators (reward compression) |
Three observations from this comparison:
1. Governance speed varies by orders of magnitude. Solana moved from proposal to threshold-clearing in approximately five weeks. Ethereum's EIP-8361 has no inclusion timeline after one day. Bitcoin's BIP-110 has been in discussion since late 2025 and is failing at the miner signaling stage after eight months.
2. Who votes determines the outcome. Bitcoin's miner-signaling model gives economic veto power to a small number of pool operators. Solana's stake-weighted system distributes governance power proportionally. Ethereum's social-consensus model routes through core developers, with no formal on-chain vote mechanism for protocol changes.
3. The economic constituency determines opposition. BIP-110 faces opposition from projects that generate fee revenue through data-heavy transactions. EIP-8361 faces opposition from DeFi protocols whose yield strategies depend on staking rewards. SIMD-0550 faces muted opposition because faster disinflation primarily benefits holders at the expense of future emissions recipients (validators).
Bitcoin: BIP-110's failure has limited direct economic impact. Ordinals and Runes activity continues. The indirect signal, however, is that Bitcoin's governance process lacks the capacity to impose monetary policy changes even when a vocal segment of the developer community supports them. With annual issuance at 0.84% and the next halving in April 2028, Bitcoin's supply schedule remains the most mechanically rigid of the three networks.
Ethereum: EIP-8361 would restructure the yield layer beneath approximately $30 billion in staked ETH. A 54% reduction in staking yield would cascade through liquid staking tokens (stETH, rETH), restaking protocols (EigenLayer), and DeFi lending markets that price borrowing against staking returns. According to CryptoSlate, leveraged staking loops — where users borrow ETH to stake for a net positive carry — would become "a daily loss machine" if borrowing costs remain above the compressed yield. The proposal would effectively impose a ceiling on Ethereum's staking ratio by making additional staking economically irrational beyond approximately 50% participation.
Solana: The combined SIMD-0550 and SIMD-0553 proposals would remove approximately $1.39 billion in future SOL emissions while increasing daily burns by roughly 14x. At current network activity levels, this shifts Solana's effective inflation from 3.8% toward a lower net rate. For validators, faster disinflation means lower future block rewards, but higher fee burns could partially compensate if network activity grows proportionally. The key variable is whether Solana's fee revenue can scale fast enough to offset declining inflation subsidies — the same structural question Bitcoin faced post-halving.
Three of the largest proof-of-work and proof-of-stake networks are simultaneously debating issuance changes in August 2026, a historically unusual convergence of monetary policy governance events.
Bitcoin's BIP-110 has functionally failed at <3% miner support. Solana's SIMD-0550/0553 has cleared signaling thresholds and moves to formal vote by August 18. Ethereum's EIP-8361 remains a draft with no inclusion timeline.
The proposals reveal different governance architectures producing different speeds: Solana's on-chain stake-weighted system reached threshold in five weeks; Bitcoin's miner signaling has stalled for eight months; Ethereum has no formal mechanism beyond developer social consensus.
Economic opposition maps directly to affected constituencies: miners vs. inscriptions creators (Bitcoin), researchers vs. DeFi yield protocols (Ethereum), and large holders vs. validator emission recipients (Solana).
Of the three, only Solana's proposals are likely to reach a binding vote in August 2026. If passed, they would represent the first major parameter change executed through Solana's newly launched on-chain governance system.
EIP-8361's potential 54% yield reduction would have the most significant second-order effects on existing DeFi infrastructure, particularly leveraged staking loops and liquid staking token valuations.
August 2026 has produced an unplanned natural experiment in blockchain governance. Three networks with different consensus mechanisms, governance structures, and economic models are all confronting the same fundamental question: how should a decentralized protocol adjust its monetary issuance, and through what process.
The outcomes so far suggest that formal on-chain governance mechanisms (Solana) produce faster resolution than informal signaling (Bitcoin) or social consensus (Ethereum). Whether faster resolution produces better outcomes remains an open question — Solana's governance system is weeks old and untested at scale.
The economic implications are asymmetric. Bitcoin's supply schedule remains unchanged regardless of BIP-110's outcome. Solana's proposals, if passed, would accelerate an existing trajectory. Ethereum's EIP-8361, if it were to advance, would represent the most structurally significant change — fundamentally repricing the yield stack that underpins tens of billions of dollars in DeFi positions.
For market participants, the operative question is not which proposal passes, but what each governance process reveals about where economic decision-making power actually resides in each network. The data suggests it resides with miners in Bitcoin (who blocked BIP-110), with researchers and core developers in Ethereum (who will determine EIP-8361's fate), and with staked capital in Solana (which cleared SIMD-0550/0553 in five weeks).