Solana’s SIMD-228 Proposal Fails—What It Means for Token Emissions

• Solana’s governance proposal SIMD-228 to reduce inflation failed, receiving only 43.6% approval instead of the required 66.67%.
• The proposal aimed to make inflation rates dynamic, but concerns over smaller validator profitability and network stability led to its rejection.

A proposal to change Solana’s inflation model, SIMD-228, failed to secure the required votes for approval. Although this was turned down, it was a significant development in governance participation on the network.

Multicoin Capital co-founder Tushar Jain highlighted the event’s importance, stating that it is a win for Solana governance. Dune Analytics revealed that 74% of the staked supply engaged in the vote, and 910 validators were involved.

The proposal was approved by 43.6 %, 27.4 % rejected it, and 3.3 % were neutral. Additionally, it required the endorsement of 66.67% of the voting members and only received the approval of 61.4%.

This proposal sought to alter the inflation rate from a fixed rate to a variable rate depending on participation in staking. Initially, inflation is set at a rate of 8% per annum and is then reduced in the subsequent year by 15% per annum until reaching 1.5%. According to SIMD-228, the inflation adjustment would have been made flexible, possibly leading to the reduction on issuance by 80%.

Historic Validator Participation 

As posted by Solana’s official X account, the vote received a record turnout for validators in Solana, surpassing U.S. presidential elections for the last century. For validatory stakeholders, the turnout stood at 66% of qualified votes, representing 75% of the network’s voting rights.

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

The results revealed a distinction between the small and the large validators. Over 60% of the validators with less than 500k SOLs voted against the proposal, whereas over 37% of those with more than 500k SOLs voted in favour of it.

Validator operator SolBlaze highlighted that many believe SIMD-228 that it was not the right solution for combating inflation. Economist and one of the authors of the proposal, Max Resnick, said that after listening to the various concerns that may be raised, further discussions would be made on a possible compromise.

Others claimed that the proposal could have been damaging to the smaller validators in terms of a possible impact on earnings. Some also claimed that it could destabilize Solana’s DeFi and discourage institutional investors who seek yield on Solana’s native token.

Solana validators only participate in votes when there is a change in the economic status of the protocol. SIMD-228 was the third governance proposal on record, but the debate surrounding it was highly active.

Solana’s Market Reaction 

Following the vote, Solana’s price experienced a 1.5% decline and fell to around $124. Solana has been continuously declining and has dropped below 60% within the past two months, mainly due to the reduced activity of memecoin.

The market witnessed a new all-time high in the transfer volume of SOL, having reached $3 billion for the first time since September 2024, as noted by market analysts. While the network revenue has shown an overall decline, whales have remained active in both futures and spot options. Data from Coinglass showed that perpetual futures and other contracts accounted for $26,02000, while $430,000 was traded in spot volumes in OKX, Coinbase, and Binance.