SIMD-228 Proposal Fails, but Solana’s Community Proved Its Strength

This was one of the most significant governance events in Solana’s history. The proposal aimed to replace the fixed inflation model with a dynamic system that would adjust based on staking levels. Moreover, developers believed this change would allow the network to adapt more efficiently to user activity, enhancing security and stability while avoiding excessive token emissions.

SIMD-228 proposed a major reduction in Solana’s inflation rate, which was 4.66% at the time of voting. Under the current model, inflation gradually declines to 1.5% on a fixed schedule. Had the proposal passed, inflation could have been cut by up to 80%. Supporters argued that this move would reduce excess token supply and ease pressure on SOL.

Detailed Voting Results

According to Dune, 910 validators participated in the vote, with total votes representing 74% of the staked SOL supply. However, the proposal failed to pass, gaining support from only 43.6% of participants, while 27.4% voted against, and 3.3% abstained.

Notably, the largest support for SIMD-228 came from major holders (wallets with over 500,000 SOL), with an average of 53% voting in favor. However, some significant stakers, including Binance Staking, did not participate in the vote at all.

Community Response

Although SIMD-228 did not pass, many developers and community members view it as a crucial moment in the evolution of Solana’s governance system. According to Tushar Jain, co-founder of Multicoin Capital, this was the largest governance vote by participation across all blockchain ecosystems, underscoring the high level of community engagement.

For context, Solana's market cap during the SIMD-228 governance debate was comparable to Bitcoin's market cap during the mid-2017 blocksize wars,

Jain added.

Additionally, he pointed out that Solana underwent a major stress test, demonstrating its social resilience despite differing opinions. The vote saw participation from small validators, individual users, major funds, and exchanges staking SOL. Jain specifically highlighted the role of institutional investors and announced planned improvements to the voting process.

Why Did Validators Reject the Proposal?

Since its announcement, Solana’s new inflation model has sparked intense debate. Supporters argued that a flexible issuance mechanism would help the network adapt more efficiently to market conditions and stabilize SOL’s price.

However, critics raised several concerns. The biggest issue was the potential reduction in staking rewards, which could make it harder for smaller validators to sustain operations due to lower earnings.

Market instability has further complicated the situation. Over the past two months, SOL has dropped nearly 50%, largely due to fading interest in meme coins and declining activity on entertainment platforms. Network revenues have also fallen significantly, pushing developers and investors to explore new ways to restore confidence and attract capital. However, this approach did not fully align with the proposed staking changes.

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Despite the failure of SIMD-228, this vote has already become a landmark moment in Solana’s history. While no clear consensus on inflation was reached, the high level of participation highlights that Solana remains a focal point for major players and continues to serve as a model for decentralized governance. 

In the coming months, developers are set to introduce new proposals aimed at enhancing the network.