Major Solana Vote Ends in Defeat: Why the Inflation Plan Failed?

Major Solana Vote Ends in Defeat: What It Means for SOL’s Future?

In an unprecedented voter turnout, Solana’s inflation-cutting governance proposal, SIMD-228, was not approved at the end of Thursday’s election. By replacing the network’s fixed inflation schedule with a dynamic, market-based approach that modifies SOL token issuance dependent on staking activity, the Solana Improvement Document-228 suggested changing the network’s tokenomics.

So issuance will stay the way it is,

Mert Mumtaz, CEO of Solana developer platform Helius Labs

In contrast to the present fixed inflation schedule, which is set at 4.6% annually and decreases by 15% annually until stabilizing at 1.5%, the suggested emissions model sought to bring Solana’s inflation rate down below 1% annually at the current stake rate of over 65%. While opponents claimed that SIMD-228 would have a detrimental effect on the profitability of smaller stakers and validators, supporters said that it could help long-term holders of SOL by making it scarcer and more valuable.

Solana’s Most Controversial Vote Sets Historic Participation Record

According to Solana, the 74% turnout for SIMD 228 was the highest for any U.S. presidential election in the previous century. About 64% of voters cast ballots in the 2024 U.S. election, which featured cryptocurrency as a major theme.

SIMD-228 was the biggest crypto governance vote ever — by both the number of participants and participating market cap of any ecosystem, chain or network. This vote is evidence that the network is thriving and fully decentralized.

Tushar Jain, co-author of SIMD-228 and co-founder of Multicoin Capital

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