Solana inflation reduction proposal fails despite strong community support

Solana SIMD-0228, the proposal seeking to reduce the inflation rate on the network, has failed despite massive support from several stakeholders in the community. Following several days of voting, the proposal got 61.39% of votes, less than the 66.67% required to pass the proposal.

According to on-chain data, over 281 quadrillion votes, representing a 74% turnout were cast in the voting process that ended on March 13. Despite the massive voter turnout, patterns show that network participants voted based on preconceived notions about the proposal.

Small Solana validators opposed the proposal

Over 60% of the small validators holding a maximum of 500,000 SOL voted against the proposal, with most of the opposition coming in late Thursday when opponents started calling on small validators to vote “NO.”

This massive opposition from small-scale validators is unsurprising, given they would have been most affected if the proposal had passed. The SIMD-0228 sought to reduce Solana’s current 4.7% inflation rate via staking rewards, with its proponents noting that the reduction in supply will be good for SOL in the long run.

However, there have been concerns from the start about the proposal’s impact on small-scale validators, whose operations may become less financially sustainable if it passes. Solana validator SolBlaze was one of the main opponents, calling people to vote against SIMD-0228.

While SolBlaze acknowledged the need to reduce Solana’s inflation rate,  they disagreed that SIMD-0228 was the best way to achieve this. In an earlier post, the validator said the proposal was dangerous and could destroy Solana’s decentralization. It would lead many people to unstake their SOL for better yield, reducing Solana’s staking rate, currently at 63% of the supply, to around 42%.

Following the proposal’s failure, the validator praised the outcome, noting that this was a great achievement for the community.

The validator wrote:

“Thank you to everyone who advocated against this proposal, voted no, and made your voices heard. We accomplished something truly special together.”

These events had not had much impact on SOL price with the token still stuck at $125 and down 12% in the last seven days. SOL has been one of the worst-hit major cap tokens this year, falling more than 50% from its peak price in early January 2025 and down 35% year-to-date.

Stakeholders say SIMD-0228 is still a success despite the outcome

Meanwhile, many in the Solana community consider the SIMD-0228 a historic milestone for the crypto community, even if it did not pass. Multicoin Capital co-founder Tushar Jain noted that the voting shows that the Solana network is in a strong position.

He said:

“If this vote tells us one thing, it’s that the state of the Solana network is strong. This was a meaningful scaling stress test—a social, rather than technical, stress test—and the network passed despite a wide stratification of diverging opinions and interests.”

According to him, this is the biggest crypto governance vote ever, either in terms of market cap or number of participants. Jain added the market cap during the vote is comparable to Bitcoin market cap during the blocksize wars in 2017.

Beyond the size of the votes, the executive also acknowledged the diversity of stakeholders who participated in the votes, saying that it shows the decentralization and activity of the Solana community. He noted that almost everyone, including validators, stakers, core contributors, investors, custodians, stakers, and ecosystem developers, participated in the vote, and this is the Solana proposal that has attracted the most participation from institutions.

Other key stakeholders also acknowledged this, noting that even the top validators did not fully support the proposal. Analysis of the top validators’ voting shows this group collectively cast 51.2% of available votes, with 35.8% in favor and 13.7% voted against.

With the voting now over, Helius Labs founder Mert Mumtaz has said there is no plan for any economic proposal on Solana. The network stakeholders now want to focus on technical issues, including doubling blockspace, faster finality, internet markets, and MEV infrastructure.

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