- Solana’s SIMD-228 inflation reform proposal has been rejected despite receiving 61.4% approval, falling short of the required 66.67% threshold.
- The governance vote saw participation from 74% of staked SOL supply across 910 validators, making it one of the largest crypto governance votes in history.
- Despite its rejection, many view the process as a success for Solana’s governance system, demonstrating robust stakeholder engagement.
Solana stakeholders have voted against a major proposal to overhaul the network’s inflation mechanism, with SIMD-228 failing to reach the required supermajority threshold. Despite the rejection, the vote is being celebrated as a testament to the strength of Solana’s governance process, with unprecedented participation levels across the network.
“Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process,” Multicoin Capital co-founder Tushar Jain commented on March 14.
The proposal garnered participation from approximately 74% of Solana’s staked supply, distributed across 910 validators. While 43.6% voted in favor and 27.4% voted against (with 3.3% abstaining), the final tally showed 61.4% approval – falling short of the required 66.67% threshold needed for implementation, according to Dune Analytics data.
Jain highlighted the historical significance of the vote, claiming it represented the largest crypto governance vote ever conducted by both participant count and market capitalization involvement. “This was a meaningful scaling stress test — a social, rather than technical, stress test — and the network passed despite a wide stratification of diverging opinions and interests,” he added.
The official Solana X account emphasized the impressive turnout, claiming that “Solana SIMD-228 voter turnout was higher than every US presidential election in the last 100 years.”
SIMD-228 proposed transforming Solana’s fixed inflation schedule into a dynamic, market-responsive model that would adjust based on staking participation rates. Under the current system, SOL inflation begins at 8% annually and decreases by 15% yearly until reaching a floor of 1.5%. The current inflation rate stands at 4.66%, with only 3% of the total supply staked, according to Solana Compass.
The rejected proposal might have reduced inflation by up to 80% according to some estimates. Proponents argued that high inflation increases selling pressure, potentially suppressing SOL’s price and discouraging network utilization.
Helius, a Solana developer tools provider, outlined several potential benefits of the proposal, including enhanced network security through dynamic inflation adjustments, more responsive adaptation to real-time staking levels, and greater incentives for SOL utilization in decentralized finance applications.
Critics of the proposal raised concerns that lower inflation could harm smaller validators’ profitability, introduce unnecessary complexity, and potentially create instability if staking rates fluctuated unexpectedly.
SOL’s price showed minimal reaction to the vote outcome, dipping just 1.5% to approximately $125 following the announcement. However, the token has experienced a more substantial decline of nearly 60% over the past two months following the collapse of the Solana-based memecoin trend, which had previously driven significant network activity and revenue.
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