Solana’s Toly Says IRS Staking Tax Reform Matters More Than Tokenomics Tweaks

Solana Labs co-founder Anatoly “Toly” Yakovenko is highlighting U.S. tax policy as a more consequential issue for the network than another round of tokenomics changes. He argues that reforming how the IRS taxes staking rewards could deliver broader benefits than adjustments to SOL burns, transaction fees, or inflation.

The Staking Tax Problem

The issue stems from IRS Revenue Ruling 2023-14, which treats staking rewards as ordinary income when a validator or delegator obtains “dominion” over the assets. Under the current framework, tax can be due before the recipient has sold the tokens or realized cash from them.

For example, someone receiving 100 SOL in staking rewards while the token trades at $150 could face income tax on $15,000 of reported rewards, even if those tokens remain staked or otherwise untouched. That creates a potential mismatch between a taxpayer’s liability and available liquidity, particularly during periods of market volatility.

A proposed alternative would classify staking rewards as newly created property rather than immediately taxable income. Taxes would then generally be triggered when the tokens are sold, applying a realization-based approach to rewards.

Push for Regulatory Change

The reform effort has attracted support from policymakers and industry advocates:

• In December 2025, Representative Mike Carey and 18 congressional colleagues asked the IRS to revise its guidance on staking and mining rewards before the 2026 tax year.
• The Solana Policy Institute has filed legal briefs supporting realization-based taxation for newly minted tokens.
• Revenue Ruling 2023-14 remains in effect, and the IRS has not announced a formal rulemaking process to change it.

The debate extends beyond Solana. Stakers on Ethereum, Cosmos, and other proof-of-stake networks face similar treatment in the United States, making the issue a shared industry concern rather than a Solana-specific dispute.

Yakovenko’s comments come after SGP-0002 was approved in late August 2026. The governance proposal doubles Solana’s disinflation rate to 30%, accelerating the reduction in new SOL issuance. While he has indicated support for testing burn mechanisms that could benefit application developers, he presents those efforts as complementary to improvements in network capacity and latency—not substitutes for tax reform.

What This Means

A change to staking taxation could affect participation, liquidity management, and the economics of proof-of-stake networks across the U.S. By Yakovenko’s reasoning, clearer realization-based rules could compound with faster, lower-latency infrastructure to support ecosystem growth more effectively than supply adjustments alone.

However, no tax change has been adopted. With the 2026 tax year already underway, U.S. stakers face continued uncertainty, and any guidance change would need to arrive soon to affect current filing obligations. Until then, network governance can modify SOL issuance, but it cannot resolve the tax liability created by existing federal policy.