Solana gains 9% after garnering historic number of on-chain votes in failed SIMD-228 proposal

Source Fxstreet
  • Solana reclaimed the $130 price level after 74% of staked SOL was used in participating in its recent on-chain vote.
  • The rise in Solana's price follows the rejection of the SIMD-228 proposal.
  • The proposal aims to switch SOL's issuance from a fixed inflation rate to a dynamic model by altering staking rewards.

Solana (SOL) is up 9% on Friday following the result of the recent Solana Improvement Document (SIMD) 0228 governance vote, which failed to meet the required 66.67% approval threshold of participatory votes .

Solana validators vote against SIMD-228, SOL sees slight recovery

SIMD-228 failed to receive the required support needed for implementation, as 66.67% of yes votes were necessary for it to pass. The voting ended with 27.6% of validators voting no, while 43.6% voted yes, per Dune analytics dashboard by kagren0.

74% of Solana's staked supply was used in voting among 910 validators, marking the network's highest governance vote ever.

SIMD-228 voting status

SIMD-228 voting status. Source: Dune dashboard by kagren0

"To put that in context, SIMD-228 was the biggest crypto governance vote ever — by both number of participants and participating market cap of any ecosystem, chain, or network," said Tushar Jain, cofounder of Multicoin Capital.

Most of the voters included large and small validators and stakers from diverse sections of the Solana ecosystem. Notably, validators with greater stakes supported the proposal, while those with 500,000 SOL and less voted against it.

SIMD-228, introduced by Multicoin Capital, is a governance proposal that aims to alter Solana's inflation rate from a fixed schedule to a more dynamic, market-based emission mechanism. Solana's current inflation rate is around 4.7% annually, with a fixed schedule that decreases by 15% until it reaches a terminal rate of 1.5%.

SIMD-228 proposes a switch from the annual 4.7% inflation to an emission rate that adjusts based on how much SOL is staked.

The proposal was met with heated debates across the Solana ecosystem. Supporters argued that a dynamic model will reduce inflation, stabilize SOL's price, and incentivize its usage across decentralized finance (DeFi) protocols.

In contrast, opposers argued that reducing staking rewards could harm decentralization by forcing smaller validators offline. They also pointed out that reducing inflation for a network as recognized as Solana could harm its growth in the long run.

SOL is trading near $134 at the time of writing, up 9% in the past 24 hours.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Circle stock plunges 15%, analysts predict bearish pressure from key long-term headwindsCircle (CRCL) shares slid 15% on Tuesday following analysts' predictions that declining interest rates and competition from other stablecoin issuers would affect its long-term growth.
Author  FXStreet
Jun 25, Wed
Circle (CRCL) shares slid 15% on Tuesday following analysts' predictions that declining interest rates and competition from other stablecoin issuers would affect its long-term growth.
placeholder
Bitcoin Cash Price Prediction: BCH targets 52-week high as on-chain data indicate room for growthBitcoin Cash (BCH) is trading in the green by 2% at press time on Thursday, following a 6.39% price surge on Wednesday.
Author  FXStreet
Jun 26, Thu
Bitcoin Cash (BCH) is trading in the green by 2% at press time on Thursday, following a 6.39% price surge on Wednesday.
placeholder
Gold price declines to fresh two-week low, further below $3,300 ahead of US PCE dataGold price (XAU/USD) attracts fresh sellers following the previous day's directionless price move and slides back below the $3,300 mark during the Asian session on Friday.
Author  FXStreet
21 hours ago
Gold price (XAU/USD) attracts fresh sellers following the previous day's directionless price move and slides back below the $3,300 mark during the Asian session on Friday.
placeholder
Why Hasn't Ethereum Broken Through the $2,500 Key Level?Ethereum (ETH) fell nearly 1% in early trading on Friday. As of this writing, Ethereum is trading around $2,440.
Author  Insights
19 hours ago
Ethereum (ETH) fell nearly 1% in early trading on Friday. As of this writing, Ethereum is trading around $2,440.
placeholder
EUR/USD consolidates near highs as investors ramp up bets for Fed rate cuts The EUR/USD pair appreciates for the seventh consecutive day but remains capped below the nearly four-year high at 1.1745 reached on Thursday.
Author  FXStreet
18 hours ago
The EUR/USD pair appreciates for the seventh consecutive day but remains capped below the nearly four-year high at 1.1745 reached on Thursday.
Related Instrument
goTop
quote