In a remarkable showcase of on-chain governance, the proposal aimed at cutting Solana’s inflation rate by 80%, known as SIMD-228, has officially failed to meet the required voting threshold for approval. This outcome highlights the complex dynamics of the Solana ecosystem as numerous smaller validators voted against the measure, tipping the balance below the necessary 66.67% approval target.
The SIMD-228 vote coincided with another significant proposal, SIMD-123, both of which concluded with unprecedented levels of participation. According to a leading Solana validator, SIMD-228 attracted an incredible 74.3% of all eligible stakes, while SIMD-123 managed around 57.1%. Despite garnering a substantial 61.39% “Yes” vote, SIMD-228 ultimately fell short of the requirement. In contrast, SIMD-123 passed successfully with an impressive 74.91% approval rate.
Laine, a prominent figure within the community remarked, “This has been a massive milestone in Solana governance with absolutely earth-shattering participation and contentious debate. It is incredible to witness this level of investment by so many stakeholders.” The engagement from community members, investors, and developers emphasizes the desire to discuss potential impacts on inflation, staking rewards, and the overall health of the chain.
The varying outcomes between SIMD-228 and SIMD-123 have been attributed to a schism in preferences among validators which stem from differing incentives and concerns regarding profitability. On one hand, large validators supported the proposal, as they were less likely to be affected by reduced staking rewards. In contrast, smaller operators voiced fears that a decrease in staking rewards, resulting from a lower inflation rate, might threaten their business viability.
- Large validators favor lower inflation rates, hoping it will enhance the long-term value of SOL.
- Small validators fear reduced profitability could make running nodes unfeasible.
Cyphereus Prime, founder of X1, commented on this issue, noting the proposal’s potential to drastically reduce SOL issuance, with at least $4B in SOL issuance being reduced per year, which hypothetically would also alleviate sell pressure. However, such advantages could come at the cost of smaller validators being forced to leave the network due to the sustainability of their staking rewards.
The historic turnout for these proposals positions Solana as a leader in decentralized governance. Tushar Jain, co-founder and Managing Partner at Multicoin Capital emphasized this point: “SIMD-228 was the biggest crypto governance vote ever—by both the number of participants and participating market cap of any ecosystem.” This vote not only illustrates the strength of Solana’s network but also serves as a significant social stress test, showcasing the community’s ability to engage in meaningful deliberation despite diverging interests.
As the dust settles and the community reflects on these results, stakeholders remain optimistic about the potential for future proposals that can better align the incentives of various validators. The discussions that arose during this voting period promise to influence the trajectory of Solana governance and could pave the way for future reforms. For now, SOL is trading at around $126.