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

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. 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.