SIMD 0228 Proposal Failed: Major Progress in Solana Governance

Recently, a highly discussed SIMD 0228 proposal has sparked intense discussions in the Solana community. The proposal aims to maintain a staking rate of 50% by dynamically adjusting the inflation rate and to reduce the issuance speed of SOL over the long term. Although the voting participation rate reached a historic high, nearing 50% of the total token supply, the final percentage of supporting votes did not reach the required supermajority threshold of 66.67% for passage.

The background of this proposal is that Solana is gradually returning to calm after experiencing the frenzy of the cryptocurrency market. On-chain transaction volume has fallen from nearly $100 billion at the beginning of the year to less than $10 billion, a decrease of 90%, even dipping below early trading levels.

The SIMD 0228 proposal was put forward by an executive from an investment institution and has received support from several well-known figures in the industry. Supporters believe that the current fixed inflation model is a "stupid issuance" as it does not take into account the actual economic activity or security requirements of the network. They advocate for shifting the staking concept from "overpaying to ensure security" to "seeking the minimum necessary payment" through this proposal.

In addition, supporters believe that the high staking rate (65.7%) has led to a large amount of SOL being locked up, suppressing the flow of capital in the DeFi ecosystem. They hope to promote the development of the DeFi ecosystem by releasing this capital. At the same time, reducing inflation can also lower the so-called "leaky bucket effect," which refers to the value outflow caused by taxes and exchange fees.

However, the opposition led by the chairman of the Solana Foundation believes that implementing this proposal in such a short time may be too hasty. They are concerned that the lack of sufficient discussion may affect participants at all levels of the network. Some have also expressed concerns that small validators may drop out due to reduced inflation, which could harm the decentralization of Solana.

Although the proposal did not pass, the entire process demonstrated the activity and governance capability of the Solana community. The discussion process was open and transparent, with all parties expressing their views and providing arguments candidly. The opinions of community members were also given full attention and response. This open and efficient governance model sets an example for other public chain projects.

The emergence and discussion process of the SIMD 0228 proposal reflects the new challenges and opportunities faced by Solana after experiencing rapid growth. Balancing the demands of different stakeholders and promoting sustainable development of the ecosystem has become a key issue in Solana's future governance. Although this proposal was not passed, the high level of participation in the discussion itself is a valuable governance practice that lays a solid foundation for Solana's future development.