A significant proposal aiming to drastically reform Solana’s inflation system has been turned down by stakeholders, yet is acknowledged as a triumph in the network’s administrative procedure. Despite failing to pass, these events highlight the strength and scalability of Solana’s governance model. The proposal, known as SIMD-228, gathered the majority of votes; however, it fell short of the 66.67% approval required, securing just 61.4% of the votes.
Co-founder of Multicoin Capital, Tushar Jain described this event as the most extensive crypto governance voting scenario till date, factoring in the number of participants and the market cap involved. Interestingly, the voting turnout for Solana’s SIMD-228 surpassed participation in every US Presidential election last century, signifying the importance and scale of this decision.
The rejected proposal aimed to adjust Solana’s inflation from a fixed layout to a dynamic model base on market trends. At present, Solana experiences an initial 8% annual inflation, which gets reduced by 15% per year till it reaches 1.5%. The new system could have potentially lowered this by as much as 80%, claims some experts. However, such a substantial drop could have negatively impacted smaller validators’ profitability and may have led to instability due to increased complexity and unprecedented shifts in staking rates.
Despite the failed proposal, the SOL currency experienced only a minor 1.5% dip, reflecting the stability of the crypto platform’s reaction to these governance decisions. Even though Solana has seen a near 60% depreciation within two months due to the bursting of the memecoin bubble, it continues to stand resilient in the face of these market perturbations.