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- SIMD-228 failed with 61.4% approval, not reaching the required 66.67% supermajority. Solana’s inflation rate remains at 4.6%, decreasing to 1.5%.
- The vote set a record with 74% turnout, the largest in crypto governance.
- SIMD-123 passed with 75% support, improving transparency in staking rewards.
Solana (SOL) recorded its highest-ever voter turnout for an important governance proposal, SIMD-228, to redesign the network’s inflation framework. But the proposal failed to garner the necessary votes, and the current fixed inflation schedule remained unchanged.
SIMD-228 suggested moving away from Solana’s fixed inflation model to one that is dynamic and market-driven. Under the current framework, the inflation rate for SOL is 4.6% annually, which tapers off by 15% every year until it is at 1.5%. It aims to reduce the rate to below 1%, with staking participation depending on it, particularly at the prevailing 65% staking.
Supporters believed the transition would improve the long-term value of the SOL by reducing the growth rate in token supply, making it more valuable and rare. Critics, however, were afraid the transition would disproportionately hurt small stakers and validators by reducing their profitability.
Solana’s 74% Turnout Vote Fails at 61.4%
Voting for SIMD-228 began on March 6 at Solana Epoch 753 and concluded at the end of Epoch 755. It needed at least 66.67% “yes” to pass. But the proposal was only supported by 43.6% who voted for it, with 27.4% voting against it—yielding an approval rate of 61.4%, short by the margin needed.
Despite its failure, SIMD-228 made history as the largest crypto governance vote ever, in terms of participation and market capitalization representation. The voter turnout reached 74%, surpassing even the highest U.S. presidential election turnouts in the past century, solana wrote on X.
“So issuance will stay the way it is,” said Mert Mumtaz, CEO of Solana developer platform Helius Labs, confirming the outcome on X (formerly Twitter).
Tushar Jain, co-author of SIMD-228 and co-founder of Multicoin Capital, saw the vote as a testament to Solana’s decentralization. “This vote is evidence that the network is thriving and fully decentralized,” Jain stated.
SIMD-228 Rejected, SIMD-123 Approved
While SIMD-228 didn’t work, another proposal for governance, SIMD-123, passed. SIMD-123 proposal creates an on-chain mechanism for validators to share some revenue with stakers. Some validators currently provide incentives with off-chain agreements, causing inconsistencies and opacity. With almost 75% voting in favor of SIMD-123, Solana seeks to standardize and formalize reward sharing.
SIMD-228 didn’t go through, but 123 did. Though the two proposals were to reduce revenue for validators,” Solana Labs co-founder Anatoly Yakovenko explained. “Not everyone who’s voting against 228 is voting against it because it’s in their self-interest.”
The unsuccessful passing of SIMD-228 mirrors the intricacy of network governance and the heterogeneity of interests in the Solana ecosystem. Although the rejection of the proposal does nothing to change the inflation schedule for SOL, the record turnout signals increased participation in decentralized governance.
Meanwhile, the approval of SIMD-123 is an advancement towards increased transparency in staking rewards, another step towards the stabilization of Solana’s network dynamics.
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