TL;DR
- Proposal Rejected: Solana voters turned down the SIMD-228 proposal, opting to keep the fixed inflation model for SOL tokens.
- Dynamic Model Idea: The proposal aimed to adjust inflation based on staking rates, potentially making the inflation rate inversely related to staking participation.
- Historic Vote Outcome: With 74% participation from 910 validators, the proposal reached only 61.4% in favor—falling short of the 66.67% approval threshold.
The Solana community has voted against the SIMD-228 proposal, which aimed to introduce a dynamic inflation model for the network’s native SOL tokens. The proposal, which sought to replace the existing fixed inflation schedule with a market-driven approach, failed to secure the necessary majority for approval.
The Proposal
Authored by Tushar Jain and Vishal Kankani of Multicoin Capital, the SIMD-228 proposal aimed to dynamically adjust Solana’s inflation rate based on staking participation.
The current fixed inflation schedule starts at 8% annually and decreases by 15% each year until it stabilizes at 1.5%. The proposed model would have adjusted the inflation rate according to the percentage of SOL tokens staked, with lower staking rates leading to higher inflation and vice versa.
Voting Results
The voting process saw an unprecedented level of participation, with around 74% of the staked supply voting on the proposal across 910 validators. Despite this high turnout, the proposal fell short of the required 66.67% approval, receiving only 61.4% of the votes in favor, 27.4% against, and 3.3% abstaining. This outcome reflects the community’s divided opinions on the proposed changes to Solana’s tokenomics.
Community Reactions
The rejection of the SIMD-228 proposal has sparked a range of reactions within the Solana community. Proponents of the proposal argued that the dynamic inflation model would have made SOL scarcer and more valuable during periods of high staking, thereby benefiting long-term holders.
They also believed that the new model would have enhanced network security by incentivizing staking during periods of low participation.
On the other hand, critics of the proposal, including Solana Foundation president Lily Liu, expressed concerns about the potential complexity and unpredictability of the new model. Liu warned that the dynamic inflation rates could deter institutional investors and create instability within the blockchain.
Despite the rejection of the SIMD-228 proposal, the voting process has been hailed as a significant milestone for Solana’s governance. The high level of participation and the extensive debate surrounding the proposal demonstrates the community’s commitment to shaping the future of the network.
