Solana’s SIMD 547 Proposal Could Redefine Network Fees

Solana’s SIMD 547 proposes resource-based fees with 100% burn. Here’s what analysts and insiders are saying about its real impact.

A new Solana Improvement Document, SIMD 547, put forward by Temporal XYZ, , is now open for discussion. It proposes a resource-based fee system on Solana. 

Under this model, 100% of the new fee goes toward burning SOL. 

The proposal aims to better align transaction costs with actual compute usage. It also seeks to increase SOL burns as network activity scales.

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What the SIMD 547 Fee Proposal Actually Suggests

The proposal’s author, known as cavemanloverboy, shared the concept as a rough brain dump. The core argument is straightforward. 

At roughly 3,000 transactions per second, the current base fee burn generates only about 648 SOL per day. The author describes this as many orders of magnitude below the value that network traffic actually generates. 

This makes SOL, in their words, a poor asset for gaining exposure to network activity.

The proposed fix involves charging 0.1 lamports per cost unit requested on every transaction. That fee gets burned entirely. 

The author notes this figure was chosen carefully. Most market makers request under 2,500 cost units per oracle update. That keeps their fee increase below roughly 5%. 

Other activity on the network, however, consumes far more resources. A regular token swap, for example, could see costs rise by over 600%.

The author also suggests the mechanism could reasonably scale up to 1 lamport per cost unit. At that level, daily SOL burns could reach between 10,800 and 64,800 SOL. 

A dynamic controller tied to block utilization could adjust the rate each epoch automatically.

SOL Strategies CEO Raises Key Concerns

Michael from SOL Strategies shared a detailed response to the proposal on social media. He welcomes the idea of resource-based transaction costs. 

He describes it as a sensible, usage-based approach that encourages network efficiency. However, he raises several questions about the broader framing.

Michael draws a distinction between SOL the token and what he calls the “Solana Economy.” 

He compares SOL to a national currency, like the US Dollar, while the Solana Economy reflects the total productive output of apps, businesses, and users building on the network. He argues these two things are not the same and should not be treated as such.

Besides, he flags the scale of the impact. Based on figures shared by SolanaCompass on GitHub, the proposal would result in roughly 650,000 SOL burned annually. 

Against a current inflation rate of around 3.8%, that translates to a reduction of only about 0.1% per year. Michael calls this insufficient for a change that could introduce downstream effects across the network.

Proposal Design and Whose Interests It Serves

Michael also points to a tension in the proposal’s structure. He notes that the document explicitly references market-making activity, particularly propAMM-style updates. 

The proposal appears to be designed, in part, to protect that specific use case. The proposer, Temporal XYZ, operates a known propAMM platform on Solana.

Michael does not dismiss the idea on that basis alone. But he urges caution around building network tokenomics around any single use case. 

He points out that dominant activity on Solana has shifted over time, from NFT mints to memecoins to propAMMs, with perpetuals now gaining ground. Designing fee structures around today’s trends may not serve tomorrow’s needs.

He also raises a longer-term point about transaction costs. Solana’s edge is speed, low cost, and programmability in one place. 

As agentic activity grows and larger institutions begin operating on-chain, the network must support transaction volumes that feel nearly free to end users. Any fee increase, even a modest one, needs to fit within that broader picture.