A proposal to overhaul Solana’s inflation model has been rejected by stakeholders, but industry leaders are hailing the vote as a milestone for the network’s governance process.
Multicoin Capital co-founder Tushar Jain described the governance event as a “major victory” for Solana, despite the proposal’s technical defeat. According to Jain, the vote was the largest in crypto governance history in terms of both participant count and market capitalization.
SIMD-228 was a historic milestone for crypto.
— Tushar Jain (@TusharJain_) March 14, 2025
Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process. Over 74% of stake turned up to vote on the proposal. Yes votes were 43.6% of stake, no…
Record-Breaking Voter Turnout
The proposal, SIMD-228, aimed to shift Solana’s inflation system from a fixed schedule to a dynamic model that adjusts based on staking participation. However, the measure failed to meet the required 66.67% approval threshold. Of the 74% of staked supply that participated, only 61.4% voted in favor, while 27.4% opposed and 3.3% abstained, according to Dune Analytics.
Despite the rejection, Solana’s governance process demonstrated its strength, with voter turnout surpassing every U.S. presidential election in the past century, according to the Solana X account.
Solana SIMD 228 voter turnout was higher than every US presidential election in the last 100 years pic.twitter.com/qJsyR1deyp
— Solana (@solana) March 13, 2025
Understanding SIMD-228 and Its Potential Impact
Currently, Solana’s inflation begins at 8% per year and declines by 15% annually until it stabilizes at 1.5%. The proposed model would have dynamically adjusted inflation based on staking levels, potentially reducing it by as much as 80%.
Proponents argued that the shift would stabilize Solana’s ecosystem by mitigating excessive token issuance and incentivizing staking. However, critics raised concerns about the complexity of the model, potential instability due to fluctuating staking rates, and the impact on smaller validators’ profitability.
Market Reaction and Future Outlook
Following the vote, SOL saw little immediate price reaction, dipping 1.5% to trade just below $125. However, the token has plummeted nearly 60% in two months, primarily due to the collapse of the memecoin trading frenzy that once fueled network activity. Additionally, Solana’s network revenue has declined by over 90% as memecoin minting slowed.
Also Read: Selloff Warning: Alameda Unstakes $23M SOL, Putting Solana Price at Risk
While the inflation model remains unchanged, the debate underscores Solana’s growing maturity in decentralized governance and sets a precedent for future economic adjustments within the network.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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