Key Insights:
- Solana’s inflation cut proposal failed with only 61.4% approval, below the 66.67% needed.
- Solana’s governance saw record voter turnout, surpassing U.S. presidential elections.
The stakeholders have rejected a proposal to substantially alter Solana’s inflation system through network participants. This occurred despite a record level of voter participation.
Solana has been facing a tough time as $485M in outflows last month hints that investors were losing confidence. Moreover, the recent denial of inflation cuts sparks a big question: Can these measures turn things around?.
At press time, SOL price was trading at $133.52 noting an intraday surge of over 5.30%. Its market cap soared to $68.46 Billion and ranked 6th in the overall market.
Solana’s SIMD-228 Proposal Denied: What’s Next for SOL?
SIMD-228 sought to modernize Solana inflation mechanics by implementing variable rate adjustments that rely on stakeholder participation levels.
Under the new model the proposed design could have decreased inflation up to 80% which would have minimized SOL selling pressure. The proposal fell short of obtaining the necessary 66.67% approval from the voting body.
Dune Analytics data reveals that about 74% of Solana’s staked supply took part in validation through 910 validators. Out of the participants, 43.6% voted in favor of the proposal while 27.4% registered their opposition and 3.3% abstained from the vote.
The proposal fell short of passing approval because the aggregated voting total reached only 61.4% of the required threshold.
Despite failure to pass the proposal, Tushar Jain of Multicoin Capital characterized the vote as a favorable outcome of governance. He announced on March 14 that although our proposed motion lost the vote it marked a fundamental success for Solana governance structure.
According to his analysis, it marked the biggest governance decision ever conducted in cryptocurrency space between participants and market capitalization.
The official X account of Solana expressed similar thoughts about the matters at hand. The voting results stated that more people participated in this event than in any U.S Presidential elections since the turn of the 20th century.
Solana’s Future Without SIMD-228: What Would Be Different?
The present inflation framework of Solana operates through a predefined path. The inflation percentage followed an 8% starting point with annual drops of 15% until it reached 1.5%.
The proposal that failed would have implemented a flexible model structure. Staking activities would determine how inflation rates evolved within this system. This approach may lead to aggressive supply inflation reduction in upcoming periods.
Those who supported this concept stated it would improve network security through stakeholder incentives yet control for excessive token creation.
Development tools company Helius outlined important advantages of the proposed system.
The network will experience improved monetary policymaking along with better network stability through this system. Several critics identified various potential dangers with this proposal.
A lower inflation rate might have posed challenges for small validators to maintain their profitability.
Solana Price Prediction: Key Levels to Watch
A recent post by Ted on X highlighted that, SOL price has retested the multi year support zone around $110-$120.
If SOL price continued to hold the level, it could see a massive reversal in the coming sessions.
On the contrary, if it slips below the $100 mark, a 30% to 40% correction will be seen ahead.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.