Solana's SIMD-228 proposal fails to secure majority vote

A significant proposal to modify Solana's (CRYPTO:SOL) inflation model has failed to pass, despite garnering substantial participation from the network's stakeholders.

The SIMD-228 proposal, which aimed to introduce a dynamic inflation rate for SOL tokens based on staking participation, fell short of the required approval threshold.

The voting process saw an impressive turnout, with approximately 74% of the staked supply participating across 910 validators.

However, the proposal only received 43.6% votes in favor, while 27.4% voted against it and 3.3% abstained.

To pass, the proposal needed a 66.67% approval rate from participating votes but only achieved 61.4%.

Despite the proposal's failure, many in the Solana community view this as a positive demonstration of the network's governance capabilities.

"Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process," Multicoin Capital co-founder Tushar Jain commented.

The SIMD-228 proposal sought to replace Solana's current fixed inflation schedule with a market-based emission model.

Under the existing system, Solana's inflation rate starts at 8% annually and decreases by 15% each year until it stabilises at 1.5%.

The proposed change would have adjusted the inflation rate based on staking participation, potentially reducing inflation by up to 80% according to some estimates.

Proponents argued that this dynamic model would enhance network security, optimise resource allocation, and encourage more active use of SOL in DeFi applications.

However, critics raised concerns about potential instability and the impact on smaller validators.

Despite the proposal's rejection, the high level of engagement in the voting process has been seen as a positive sign for Solana's governance.

The Solana team claimed that the voter turnout surpassed that of every US presidential election in the last century.

Following the vote, SOL's price experienced a minor 1.5% dip, trading just below $125.

The token has seen a significant decline of nearly 60% over the past two months, coinciding with a downturn in the memecoin market that had previously driven much of Solana's network activity.

At the time of reporting, the Solana (SOL) price was $124.77.