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- Solana’s inflation has become a growing concern as a crypto research firm introduces an adjusted voting system that could decide the outcome of future decisions on inflation reduction.
- This new system would maintain the fixed, terminal inflation rate at 1.5% and provide multiple “yes” voting options with different deflation rates.
Crypto research firm Galaxy Research has unveiled a new proposal to the Solana community to modify the network’s voting system for inflation reduction through what is called “Multiple Election Stake-Weight Aggregation (MESA)”.
According to the report filed on April 17, the proposal highlights a detailed market-driven process in deciding the SOL emissions curve. Additionally, the new proposal would ensure that validators participate in a single voting process on multiple deflation rates while using the weighted average as the outcome.
Galaxy Research also explained that the new adjustment was motivated by the decisions around the previous proposal (SIMD-228). On that one, the validators agreed on a reduction of SOL inflation; however, consensus on specific parameters could not be reached.
Out of the 910 validators who voted on the proposal SIMD-228, 43.6% voted “Yes”, while 27.4% voted “No”. As detailed in our last news piece, this needed at least 66.67% approval from the community. At that time, Multicoin Capital co-founder Tushar Jain highlighted that this was a great step and a major victory for the governance system of the Solana ecosystem.
Even though our proposal was technically defeated by the vote, this was a major victory for the Solana ecosystem and its governance process…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.
While the SIMD-228 proposal sought to adjust the Solana inflation from fixed to a more dynamic and market-based model, the new one seeks to maintain the fixed and terminal inflation rate at 1.5%. The proposed MESA system would offset the existing challenges by providing multiple “yes” options with different deflation rates, such as 15%, 17.5%, 20%, and 25%, in addition to the usual “no” and “abstain” options.
Each validator would then allocate their staked weighted votes, as required. Once the “yes” votes meet the quorum and the minimum threshold, “the new deflation rate would be calculated as the weighted average across all the ‘yes’ selections.”
Unlike the previous voting system, this would preserve predictability and ensure that validators express preference along a range of spectrums in a single voting process.
This approach is much more market-driven than single-outcome votes, effectively allowing each individual validator to vote for the new inflation schedule that best aligns with how they or their delegators view, assume or prefer the future while ultimately maintaining the predictability of a fixed curve. Paired with split voting, we think this market-driven approach to protocol governance is democratic and progressive, offering a new method for protocol governance.
Solana’s effort is not only channelled towards a favourable alternative voting system. As outlined in our recent blog post, it introduced a proposal titled SIMD-0215 to improve scalability through a lattice-based hashing system. Additionally, it has unveiled a Confidential Balance to enhance privacy and compliance, as featured in our recent coverage.
