Solana Inflation Proposal Fails Amid Record Voter Turnout

Key Insights:

• Solana’s inflation cut proposal failed with only 61.4% approval, below the 66.67% needed.
• Analysts predict a potential SOL price drop to $90 amid bearish momentum.
• Solana’s governance saw record voter turnout, surpassing U.S. presidential elections.

A plan to modify Solana (SOL) inflation model has failed to garner enough support. This occurred despite a record level of voter participation.

At the same time, analysts warn that SOL price could be on the verge of another major decline. The targets are set as low as $90.

SIMD-228 Proposal Fails of Solana to Pass

SIMD-228 proposed replacing the fixed inflation schedule of Solana with a dynamic system that adjusts rates based on stake participation.

The proposed model would have reduced inflation by up to 80%, mitigating selling pressure on SOL. However, it failed to reach the required 66.67% approval threshold.

Data from Dune Analytics shows that around 74% of Solana’s staked supply participated in the vote across 910 validators. Of those, 43.6% supported the proposal, 27.4% voted against it, and 3.3% abstained.

The remaining votes failed to meet the passing requirement, with total approval reaching just 61.4%.

SIMD-228 was a historic milestone for crypto.

Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process. Over 74% of stake turned up to vote on the proposal. Yes votes were 43.6% of stake, no…

— Tushar Jain (@tushar_jain) March 14, 2025

Despite the proposal’s rejection, Multicoin Capital co-founder Tushar Jain framed the vote as a win for governance. “Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process,” Jain stated on March 14.

He added that this was the largest governance vote in crypto history in terms of both participants and market cap.

The official X account of Solana echoed similar sentiments. It claimed that voter turnout surpassed every U.S. presidential election in the last 100 years.

What Would Have Changed?

Solana’s current inflation model followed a fixed trajectory. It started at 8% annually and decreased by 15% per year until reaching 1.5%.

The rejected proposal aimed to shift to a dynamic model. There, inflation rates would adjust based on staking levels. Moving ahead, this could potentially reduce supply inflation more aggressively.

Proponents argued that such a model would enhance network security by incentivizing staking while preventing excessive token issuance. Helius, a Solana developer tools provider, highlighted key benefits.

This includes a more responsive monetary policy and greater stability for the network. However, critics pointed out several risks. Lower inflation could have made it harder for smaller validators to remain profitable.

On the other hand, increased system complexity could introduce new uncertainties. Unexpected shifts in staking rates might have also led to volatility in network rewards.

SOL Price Faces Bearish Outlook

SOL traded around $125 when writing, dipping 1.5% on the day with little immediate reaction to the failed proposal. However, the token has lost nearly 60% of its value in two months.

The main cause was the collapse of the memecoin trading craze that had previously driven Solana’s network activity.

TradingView analyst MadWhale suggested Solana could drop another 26% to test the $90 support level. He pointed to a descending channel pattern on the charts, with SOL forming lower highs and lower lows. It is a structure that indicates continued downside momentum.

“The $90 level is marked as the main monthly support, where a potential bounce back or accumulation is set to arise,” MadWhale noted. He also highlighted $100 as a key psychological resistance level.

Solana’s broader market sentiment has also weakened. CoinCodex data showed that the Fear and Greed Index for SOL has dropped to 34, signaling increasing fear among investors. Over the last 30 days, Solana has recorded more red days than green, reflecting a sustained downtrend.

What’s Next for Solana?

The rejection of SIMD-228 means Solana will maintain its current inflation structure. Some stakeholders see this as a missed opportunity to stabilize supply. However, the governance process has been praised as a sign of a maturing ecosystem.

Meanwhile, traders remain focused on price action. With market sentiment tilting bearish, analysts warn that further declines could be imminent unless SOL finds strong support soon.

Whether the network’s governance strength translates into long-term confidence remains an open question.

Disclaimer

This article is for informational purposes only. Crypto investment involves inherent risks due to the volatility in price. Readers should conduct their own research before making any investment decision. Also, you can consult a crypto expert before investing in cryptocurrencies.