SIMD-228 Solana proposal to cut SOL inflation rate rejected

SIMD-228, a proposal aimed at reducing the resolution’s inflation rate by 80%, did not reach the voting threshold for approval after many small validators voted against him.

Depending on the SIMD voting status, 61.39% of voters supported SIMD-228 governance vote, which was less than 66.67% required for approval. With a record participation rate of 74% at the end of the vote on March 13, it was the greatest vote of cryptographic governance ever in terms of market value and participation.

The voting scheme revealed a flaw among the members of the network despite a high commitment. More than 60% of the smallest validators with 500,000 Solana (GROUND) or less voted against the proposal. Validators with larger issues, however, massively argued, indicating how the proposal would have had an impact on various groups.

Solana’s current inflation system establishes a balance between burning transaction costs and the generation of ignition rewards. More costs are burned during periods of high network activity, which helps keep inflation under control.

However, fewer tokens are removed from traffic as the transaction costs have decreased. Meanwhile, at an inflation rate of 4.7%, the cleansing awards continue to add new soil to the market. The purpose of Simd-228 The ignition rewards had to reduce, which would slow down the growth of the soil supply and potentially increase its value.

Under the proposal, inflation would have dropped below 1% at the current participation rate of 65%. However, the smallest validators would have had difficulty remaining profitable, because many of them invoice little or no commission. If enough had left the network, Solana’s decentralization could have been weakening, which made concerns about long -term stability.

While SIMD-228 failed, a different proposal, SIMD-123, succeeded with a support of almost 75%. This modification will allow validators to distribute rewards in a transparent manner by allowing them to divide some of their gains with stakeholders via a chain system. According to the conclusions of the vote that has just finished, network participants prefer to modify the incentives to the validators on the reduction of inflation.