The Solana Fee Proposal Isn't About Fees, Says The Engineer Backing It

Solana’s (SOL) proposed SIMD-0553 fee overhaul is aimed less at raising costs for ordinary users and more at making high-resource traders, inefficient apps and arbitrage-heavy activity pay for the capacity they consume, according to Cavey Cool, Lead Engineer at Temporal.

The proposal introduces resource-based pricing on Solana, changing how transactions are charged based on the compute and network resources they use. Supporters say the change could make the network more efficient and raise daily SOL burns from about 650 SOL to as much as 7,500 to 9,000 SOL.

In an interview with Fathom.news, Cool said the burn impact is meaningful, but not the main purpose of the proposal.

“The primary objective of this SIMD is to fix the incentive structure to align the interest of core developers and onchain app developers to make Solana fast,” he said. “The shift in tokenomics, although it is very welcome, has been properly considered, and is certainly nontrivial, is a secondary effect of this change.”

Retail Users May Avoid Major Fee Impact

For ordinary users, Cool said the change is unlikely to create a major increase in total transaction costs. Exchange fees will likely remain the larger cost for retail traders, while most Solana transactions should remain below one cent.

Even the most computationally intensive transaction possible on the network would cost about five cents at current SOL prices, he said.

That makes the proposal less of a broad user fee hike and more of a targeted repricing of network-heavy activity.

Arbitrage Activity Comes Under Pressure

Cool said the largest volume of high-resource transactions comes from arbitrageurs that spam the network while extracting value from market makers serving retail users.

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“We expect to both reduce this extraction and redirect a bit of this value to the base token by charging these users more fairly for the resources they consume,” he said.

The proposal could also force developers to optimize smart contracts that currently consume heavy resources without paying for them. Cool said some load-bearing Solana contracts are more than ten times slower than an optimal implementation.

Solana Moves Toward Priced Compute

The reform also changes how Solana thinks about its own economics. Instead of treating cheap blockspace as the only priority, SIMD-0553 would make access to compute a priced network resource.

“Solana is not an exchange,” Cool said. “Solana is the world’s fastest global state machine, an operating system that enables things like exchanges to exist and compete with one another.”

He added that Solana promises builders access to storage, availability and compute, but currently sells those resources at zero cost.

“In this sense, this proposal is simply fixing Solana’s business economics,” Cool said.

The proposal also sits alongside SIMD-0550, which accelerates Solana’s disinflation schedule. Cool said the two proposals are synergistic in reducing issuance, but differ in their impact. SIMD-0550 affects emissions, while SIMD-0553 changes the incentives for users, developers and applications on the network.