Solana’s plan to double its annual disinflation rate has drawn criticism from SOL Strategies CEO Michael Hubbard, who has argued that the network’s current inflation of about 4% to 4.5% does not justify an accelerated reduction.

Solana inflation cut has come too early, Hubbard says

Michael Hubbard, CEO of Solana infrastructure and treasury company SOL Strategies, told crypto.news that the inflation change was premature and had been pushed through before its effects on network participants were fully understood.

SGP-0002, known as Double Disinflation, would increase the rate at which Solana’s inflation falls each year from 15% to 30%. The proposal retained the network’s existing terminal inflation rate of 1.5% but shortened the estimated time needed to reach it from 5.7 years to about 2.8 years.

According to Solana’s final governance tally, SGP-0002 received 176.29 million SOL in support, equal to 67% of participating stake. Another 66.19 million SOL opposed the proposal, while 20.63 million SOL abstained. Participation reached 60.7% of the eligible stake.

The result exceeded the published 66.67% approval requirement by roughly one-third of a percentage point. As previously reported, the proposal could remove an estimated 18.9 million SOL from projected issuance over six years, equivalent to about 2.6% of the supply expected under the existing schedule.

Hubbard said inflation of about 4% to 4.5% was “not that extreme” and rejected the view that issuance was the main force holding back SOL’s market performance. In his assessment, calling inflation the problem offers an overly simple explanation for the token’s price movements.

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 said 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 SOL price appreciation failed to offset the lost revenue. The firm also said frequent changes to established economic parameters could make financial planning more difficult for validators and other businesses.

Hubbard’s company has direct exposure to the issue. SOL Strategies operates Solana validators, provides staking services, and manages a SOL treasury. Its earnings can therefore be affected by staking rewards, validator revenue, and changes in the value of SOL.

SGP-0003 vote has opened a dispute over abstentions

Alongside his concerns about inflation, Hubbard questioned how Solana officials interpreted the result of SGP-0003, the Resource and Inclusion Fee proposal.

The official final tally gave SGP-0003 53.9% support, with 18.92% voting against it and 27.18% abstaining. Under the formula displayed in Solana’s current governance documents, abstentions count toward both quorum and the denominator used to calculate approval, leaving the proposal below the required two-thirds level.

Hubbard argued that the calculation method communicated when voting began treated abstentions differently. Under that interpretation, abstentions helped meet quorum but were excluded when calculating the share of decisive votes cast in favor or against.

Excluding abstentions, SGP-0003 secured approximately 74% of the stake that selected either option, enough to exceed the two-thirds requirement. Hubbard therefore considers the proposal approved under the rules participants were originally given, even though he believes rejection may produce a better practical result.

Solana Compass stated before the ballot that SGP-0003 needed 66.67% of the combined “for” and “against” stake and that abstentions would not affect the outcome. An Aug. 9 report on the tokenomics debate also described the calculation as excluding abstentions from decisive stake.

The Solana Constitution currently says the opposite. Article IV states that the approval denominator consists of “For + Against + Abstain,” while the repository’s voting policy repeats that abstaining stake counts as participation without contributing to the “for” tally.

According to Hubbard, applying a different calculation after voting started moved the goalposts for validators and delegators. He said procedural integrity required using the rules presented when the ballot opened, regardless of whether the resulting proposal was good policy.

Resource fees could add costs for Solana applications

SGP-0003 supported a redesign of Solana’s 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 SIMD-0553, transactions would instead carry a 2,500-lamport inclusion fee paid to the block producer and a separate fee based on the computing resources requested. The protocol would burn the resource-based portion in full.

Using network activity from May 2026, the proposal’s authors estimated that daily SOL burns could rise from about 648 SOL to between 1,500 and 1,800 SOL during the first stage. Later stages could increase the estimated range to between 3,750 and 4,500 SOL and eventually between 7,500 and 9,000 SOL.

Hubbard said the model would introduce unnecessary transaction complexity. Resource-heavy applications, trading routers, and order-book operators could face higher costs because fees would depend on how much computing capacity their transactions request.

SOL Strategies’ CEO also raised concerns about the financial interests of the proposal’s supporters. SIMD-0553 was written by Cavey of Temporal, a research and development company that says it built HumidiFi, one of Solana’s dominant proprietary automated market makers.

Hubbard alleged that the proposed fee structure could benefit the associated propAMM while imposing higher costs on direct competitors. No independent transaction-level study cited in his statement established the size of any competitive advantage, making the conflict claim Hubbard’s assessment rather than a confirmed effect of the proposal.

Before the vote, a simulation hosted by Sandwiched.me examined the expected cost for routers, applications, and propAMMs at different resource-fee rates. The dashboard showed that the effect varied according to transaction design, requested compute limits, and whether applications optimized their resource use.

Solana’s earlier inflation vote also divided validators

Debate over issuance did not begin with SGP-0002. In March 2025, Solana validators considered SIMD-0228, which proposed replacing the fixed inflation schedule with a rate that responded to staking participation.

Under the model, inflation would fall when a large share of SOL was staked and rise when participation dropped enough to create security concerns. The proposal received 61.39% support but failed to clear the required two-thirds threshold.

Ahead of that ballot, earlier coverage reported that Solana’s annual inflation stood near 4.6% and was already set to decline by 15% each year until reaching 1.5%. Critics warned that a sharp reduction could weaken smaller validators by lowering rewards while fixed hardware and voting expenses remained.

Hubbard’s position differs from supporting the existing inflation level permanently. He said neither SGP-0002 nor SGP-0003 was critical to Solana’s future and described the timing and process as more concerning than the long-term policy goals.

For U.S. investors, the proposals also affect exposure held through SOL Strategies shares. The Canadian company trades on Nasdaq under the ticker STKE and on the Canadian Securities Exchange under HODL, giving American shareholders indirect exposure to Solana validator income, staking activity and the company’s SOL holdings.

According to the company, Hubbard became its full-time CEO in 2026 after serving as interim chief executive from October 2025. SOL Strategies’ Nasdaq listing began under STKE in September 2025, replacing its previous OTCQB trading arrangement.

SGP-0002 has provided a governance mandate rather than an automatic change to issuance. SIMD-0550 still requires validator-client implementation, consistent inflation calculations across clients, and activation through a mainnet feature gate at an epoch boundary. Rewards earned before activation would remain unchanged, while the faster disinflation schedule would apply beginning with the following epoch.

New Jersey’s top legal and gaming enforcement officials have asked the US Supreme Court to step into a fast-growing dispute over prediction markets—specifically whether state regulators can enforce gambling rules when a platform argues it is operating under a federal framework.

Attorney General Jennifer Davenport and Mary Jo Flaherty, interim director of the New Jersey Division of Gaming Enforcement, filed a petition for a writ of certiorari on Wednesday, seeking the Supreme Court’s review of New Jersey’s enforcement action against Kalshi. The case centers on whether federal law preempts states from regulating sports bets conducted within their jurisdictions, even when the platform says its markets are registered with the Commodity Futures Trading Commission (CFTC).

Key takeaways

• New Jersey has petitioned the US Supreme Court to decide the scope of federal preemption over state regulation of sports betting on prediction-market platforms.
• The dispute is tied to whether CFTC-registered prediction markets fall under the Commodity Exchange Act and are treated as “swaps,” as argued by Kalshi.
• New Jersey’s filing points to civil actions reportedly brought by gaming regulators in at least 20 states to resolve similar jurisdictional questions.
• New Jersey warns that a Kalshi win could make many sports-betting arrangements illegal if they are offered outside CFTC-registered trading venues.
• Kalshi says it disagrees with the appeal, arguing that prediction markets cannot function under a patchwork of state regulators.

Why New Jersey wants the Supreme Court involved

In its petition, New Jersey argues that the Supreme Court is needed to resolve a jurisdictional conflict that has left prediction market operators and regulators in uncertainty. Davenport said prediction-market companies claim they offer legal sports betting across all 50 states, but that they “refuse to follow the gambling laws of any State.” She framed the dispute as Congress not creating a blanket exemption from state law for sports-betting activities.

New Jersey’s petition asks the justices to address a specific question about the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act: whether that law preempts states from regulating sports bets occurring within their jurisdictions when those bets are offered on markets registered with the CFTC.

The legal battleground: CFTC registration and “swaps”

The Supreme Court request follows an April opinion from the US Court of Appeals for the Third Circuit. According to reporting on that decision, the appellate court ruled 2-1 against New Jersey’s gaming authorities, rejecting Kalshi’s argument that it had a “reasonable chance of success” in asserting that the CFTC’s Commodity Exchange Act preempted state law.

The Third Circuit’s ruling addressed—at least for the purpose of the lower court dispute—whether Kalshi could rely on federal preemption stemming from the CFTC framework. A central part of New Jersey’s appeal is a challenge to the agency-level argument that sports bets issued through prediction-market platforms should be treated as “swaps” within the CFTC’s jurisdiction.

In New Jersey’s characterization, the key point is that federal law does not displace state sports-gambling enforcement—even where the markets are registered with the CFTC. Cointelegraph reported that it reached out to the CFTC for comment on the petition but did not receive an immediate response.

What a Kalshi victory could mean for state enforcement

New Jersey’s filing argues that the stakes extend beyond one company. The Attorney General’s announcement suggests that if Kalshi were to prevail on preemption grounds, federal prohibitions on trading “swaps” outside CFTC-registered markets could be read to make certain sports-betting activities illegal even in states where the activity would otherwise be permitted.

The logic, as presented by New Jersey, is straightforward but consequential: if CFTC preemption is broad enough to block state gambling enforcement, then sports bets structured as “swaps” would be required to comply with federal venue restrictions. That could leave market participants with fewer lawful pathways—depending on how the platform structures its offerings and where and how trading occurs.

Kalshi, however, rejected the approach. In a statement to Cointelegraph, spokesperson Dani Lever said the company disagreed with New Jersey’s decision to seek Supreme Court review, arguing that it cannot be “regulated by 50 different regulators.” Lever added that the company remains confident in the lower courts’ rulings and said nothing in New Jersey’s filing changes its position.

Why this case matters for the broader prediction-market sector

Whether the Supreme Court will take the case is uncertain. Observers have noted that the justices could consider the underlying preemption question in similar prediction-market disputes—whether those involve New Jersey, Nevada, or future enforcement actions against other platforms. But the timing and which specific dispute the court chooses remain open.

That uncertainty is itself part of the problem for the industry. For platforms, the outcome determines whether their compliance strategy is primarily federal—tied to CFTC registration and the Commodity Exchange Act—or whether states can continue to impose their own betting and licensing regimes even when platforms believe their offerings fit within federal categories.

For investors and users, the practical implication is clear: legal risk can vary sharply by jurisdiction, and the structure of a platform’s market and trading mechanics may be treated differently depending on where enforcement occurs. A Supreme Court ruling could reduce that uncertainty—or, depending on how the court rules, potentially increase it by narrowing the range of activities that states may regulate.

As the case heads toward a likely Supreme Court decision or continued appellate litigation, the most important thing to watch is whether the Court grants review and, if so, how it frames the Dodd-Frank preemption question around CFTC “swaps.” Until then, prediction markets remain in a legal gray zone where federal registration arguments and state gambling enforcement can collide in unpredictable ways.

What’s next for genetics and personality research? 

OpenSea has added Solana NFT trading to OS2, giving users access to collections such as Mad Lads and Claynosaurz through its multichain marketplace.

OpenSea brings Solana NFT trading to OS2

OpenSea said in an Aug. 31 announcement that collectors can now browse, purchase, sell, and place bids on supported Solana NFTs through OS2. The launch includes Mad Lads, Claynosaurz, Collector Crypt, and Phygitals, among other collections built on the network.

Within the same interface, collectors can manage Solana NFTs without changing wallets or visiting a separate marketplace, according to the company. Creators using Solana can also list their work for OpenSea users who may already trade assets issued on other blockchains.

Solana token trading was already available through OS2 before the latest release. Adding NFT functions fills a gap in the platform’s support for the network, as users can now trade both fungible and non-fungible Solana assets through one account.

Released publicly in May 2025 after a testing period, OS2 initially offered token trading across 19 chains. The rebuilt platform also introduced cross-chain features, marketplace aggregation and support for tokens alongside the NFT products associated with OpenSea’s original business.

By Aug. 27, OpenSea said its market data covered more than 25 networks. Four days before the Solana NFT announcement, the company connected its market data to Perplexity Computer, allowing the AI service to answer questions about tokens, collectibles and onchain trading activity.

OpenSea co-founder and CEO Devin Finzer described the data used by AI agents as “open, live, and verifiable” when announcing the Perplexity integration. The service can identify heavily traded assets and collections by drawing from current OpenSea activity rather than relying only on token price feeds.

Solana support adds competition for NFT marketplaces

For Solana collectors, OpenSea’s release adds another place to trade collections that have largely depended on marketplaces with an established presence on the network. Magic Eden began as a Solana-focused platform before adding support for other ecosystems, while Tensor has built products around professional Solana NFT traders.

OpenSea’s entry creates more overlap among the marketplaces, though the company did not provide trading-volume targets, user projections or market-share estimates for its Solana product. Its announcement focused on access to collections and the ability to use existing wallets across supported networks.

The release also restores a service that OpenSea had tested several years earlier. In April 2022, the marketplace introduced Solana NFT support in beta, making Solana its first supported non-Ethereum Virtual Machine network. The new OS2 implementation brings Solana collections back into the platform more than four years after that initial test.

Competition now extends beyond individual NFT listings because the largest marketplaces have added networks, wallets, and token products to retain users. OpenSea has followed that model through OS2, combining its NFT marketplace with fungible-token trading and products that can pull liquidity from several chains.

Its July 2025 acquisition of Rally Wallet added a mobile-first wallet business focused on NFTs and tokens. OpenSea planned to place Rally’s technology within its product range, while Rally co-founder Chris Maddern joined the company as chief technology officer.

OS2 had launched two months before the Rally transaction with real-time liquidity aggregation and cross-chain functions. The wallet purchase gave OpenSea another route to develop mobile trading without separating token activity from NFT portfolio management.

OpenSea continues adding products beyond NFTs

While restoring Solana NFT trading, OpenSea has continued developing services outside its original collectibles market. In June, product executive Zack Brenner asked users about early access to perpetual futures and later indicated that Hyperliquid could supply the infrastructure.

The planned perpetual futures product would place OpenSea closer to crypto platforms that combine spot tokens, derivatives, and rewards. However, the company had not announced a release date or provided final product terms at the time of the report.

Product releases have moved ahead while OpenSea’s SEA token remains delayed. The company introduced SEA in February 2025 and initially expected to release it around March 30, 2026, with proposed uses including governance, reduced trading fees and staking linked to NFT collections.

In March, Finzer postponed the SEA launch and cited difficult market conditions. OpenSea did not provide a replacement date, while users who joined parts of its Waves rewards campaign received an option to recover certain platform fees by giving up associated Treasure Chest rewards.

The token was intended to support OpenSea’s plan for an application covering NFTs, fungible assets and other forms of crypto trading. Solana NFT support advances the product side of that plan without changing the unresolved schedule for SEA.

US regulatory questions remain relevant to OpenSea

For US users, access to Solana NFTs comes after the Securities and Exchange Commission ended an investigation into OpenSea without filing charges. The agency had issued a Wells notice in August 2024, indicating that its staff could recommend enforcement action based on the view that some NFTs traded through the marketplace might qualify as securities.

OpenSea said in February 2025 that the SEC had closed the investigation. Finzer called the decision a victory for NFT creators and argued that treating NFTs as securities would misinterpret existing law.

No enforcement case followed the Wells notice, but the closure did not create a general exemption for every NFT or marketplace operating in the United States. The legal status of an individual digital collectible can still depend on how it is issued, marketed, and sold under US securities law.

In April 2025, crypto.news previously reported that OpenSea had asked the SEC to clarify that NFT marketplaces should not be treated as securities exchanges or brokers. The company’s legal team argued that platforms such as OpenSea do not execute transactions, hold customer assets, or act as intermediaries in the same way as traditional securities firms.

Bitcoin slipped lower in early Wednesday European trading, posting local lows near $76,400 before recovering to around $77,000, according to CoinGecko. The retreat came as broader risk assets weakened in Asia and as the US fixed-income backdrop remained fragile.

CryptoQuant data suggests the selloff wasn’t solely a momentum move—Bitcoin’s “apparent demand” indicator turned negative again following outflows from US spot Bitcoin exchange-traded funds (ETFs) reported the day prior.

Key takeaways

• Bitcoin sold off to roughly $76,400 before reclaiming the $77,000 area, but remains capped by a previously reported resistance cluster.
• According to CryptoQuant, Bitcoin’s apparent demand has flipped negative again after a short improvement during the August rally.
• US spot Bitcoin ETF flows showed $236 million in net outflows the previous day, aligning with the softer on-chain demand read.
• A sharp drop in USD/JPY to about 158.5 reignited speculation about another yen intervention, with no official confirmation at the time of writing.
• Asian equities fell broadly—South Korea’s KOSPI -4.0% and Japan’s Nikkei 225 -2.9%—with tech and chip names among the biggest drags.

CryptoQuant: apparent demand turns negative again

The latest leg down in BTC followed US spot Bitcoin ETF outflows of $236 million reported for the prior day. In parallel, CryptoQuant data indicates Bitcoin’s apparent demand measure has moved back into negative territory after a brief reprieve during the August rally.

The “apparent demand” concept is designed to infer whether market participants are actively absorbing newly created supply and previously dormant coins. It draws inspiration from commodity-market-style issuance versus inventory changes and attempts to capture the gap between newly mined issuance and changes in inactive supply.

In this framework, positive readings are generally interpreted as older coins waking up and the market absorbing both existing supply and new issuance—often viewed as a sign of active spot demand. Negative readings imply that coins are aging into dormancy faster than miners are creating new ones, which is typically treated as weaker spot demand conditions.

While BTC had regained the $77,000 level by the time of writing, it was still described as pinned under a nearby resistance cluster that Cointelegraph previously highlighted. The immediate question for traders is whether the bounce can break through that overhead supply or whether renewed negative demand readings will keep BTC confined.

Macro pressure: yields, USD/JPY, and possible yen intervention

Outside crypto, a broader risk-off mood was building. Earlier in the week, Cointelegraph reported on a global bond selloff that was weighing on markets; on Wednesday, the pressure appeared to ease slightly as the US 10-year yield briefly dipped below 4.8%.

However, FX markets added another layer of uncertainty. Commentators pointed to “inorganic” price movement in the USD/JPY pair around 13:00 UTC, interpreting it as a possible sign of another central bank action. USD/JPY fell to about 158.5, pulling away from the psychologically important 160 level that market participants widely expect the Bank of Japan (BOJ) to defend. At the time of writing, no official statement had confirmed whether intervention occurred.

This matters for crypto indirectly: rapid shifts in USD/JPY often reflect changing expectations for global liquidity and interest-rate differentials—conditions that can influence both risk appetite and the availability of capital for higher-beta assets like cryptocurrencies.

Asian equities slide, tech and chips lead the losses

Equities in Asia traded sharply lower, with multiple factors likely contributing, including rising oil prices and renewed profit-taking in parts of the AI complex. South Korea’s KOSPI led the decline, dropping 4.0% to close at 6,562.72. Among the largest detractors were chipmakers SK Hynix and Samsung Electronics, which fell about 4% and 4.7%, respectively.

Japan’s Nikkei 225 slid 2.9% to 64,325.64, with technology heavyweights contributing to the weakness. SoftBank Group—which has been an investor in OpenAI—was among the names weighed by the broader risk-off tape. The Taiwan index also declined, with the TAIEX down roughly 1.7%.

Earlier coverage from Cointelegraph had already raised concerns about the US side of the AI trade, including signs that credit stress was building via rising credit spreads for hyperscalers. While Wednesday’s equity weakness wasn’t explicitly attributed to any single catalyst in the source, the connection to credit sensitivity is a key reason investors often watch these developments alongside crypto—because a broad deleveraging cycle tends to pressure leveraged positions across markets.

What to watch next: demand signals and the macro backdrop

Bitcoin’s near-term direction may hinge on whether apparent demand continues to recover from the negative reading highlighted by CryptoQuant, or whether the market slips back into a pattern of dormant-supply growth. At the same time, watch USD/JPY for clearer confirmation around intervention expectations and monitor whether US yields stabilize—both can quickly change risk sentiment across crypto and traditional markets.