In a significant display of on-chain governance, a proposal to reduce Solana’s inflation rate by 80% has failed to meet the required vote threshold for passage. The proposal, known as SIMD-228, was ultimately rejected in the final stages of polling due to numerous smaller validators voting against it, tipping the balance below the necessary 66.67% approval target.
The vote on SIMD-228 took place alongside another proposal, SIMD-123, both of which saw unprecedented levels of participation. According to Laine, a prominent Solana validator, SIMD-228 attracted 74.3% of all eligible stake, while SIMD-123 drew 57.1%. Despite securing a solid 61.39% “Yes” rate, SIMD-228 fell short of the required supermajority. In contrast, SIMD-123 successfully passed with a 74.91% approval rate.
The rejection of SIMD-228 has sparked intense debate within the Solana community, with differing opinions on the potential impacts of reducing the inflation rate. Smaller validators expressed concerns about the possibility of reduced staking rewards under the new regime, which could lead to increased infrastructure costs and potentially force them off the network. On the other hand, larger validators supported the proposal, citing the potential long-term benefits for SOL’s value.
Cyphereus Prime, founder of X1, highlighted the impact of the proposal on Solana’s tokenomics, noting the significant decrease in future token issuance and reduced sell pressure. However, concerns remain about the potential exodus of smaller validators from the network if their staking rewards are cut.
Tushar Jain, co-founder and Managing Partner at Multicoin Capital, praised the record-breaking turnout for the vote and emphasized its significance for decentralized governance. Despite the defeat of SIMD-228, Jain highlighted the importance of the thorough deliberation process and pledged to incorporate community feedback for future proposals.
Overall, the failed vote on Solana’s inflation reform underscores the complexities of on-chain governance and the diverse interests at play within the Solana ecosystem. While the outcome may not have been what some had hoped for, the high level of engagement and debate surrounding the proposal demonstrate the strength and vibrancy of the Solana network.