SIMD-0228 Rejected in “Biggest Crypto Governance Vote Ever”

Following a record-breaking voter turnout, SIMD-0228 opponents have snatched victory from the jaws of defeat. While SIMD-0228 approval looked guaranteed to pass when the critical vote began, smaller validators came out in force to turn the tides in a nail-biting finish.

Despite the proposal’s rejection, SIMD-0228 co-author Tushar Jain still considers the landmark proposal a “major victory for the Solana ecosystem.

Meanwhile, some validators found a creative new utility for their vote tokens, potentially kickstarting a new meta for future proposals.

SIMD-0228 Yes Votes Fall Short of 66% Requirement

Earlier this week, SIMD-0228 looked set for a landslide victory. Votes cast in favor of the proposal outweighed ‘no’ votes 3-to-1, suggesting Solana validators were eager to see inflation come down as the network flipped to a dynamic emission schedule.

Remarkably, SIMD-0228 opponents mounted a historic comeback. With time winding down, validators turned out in record-breaking numbers to flip the decision. Despite the majority of votes being cast in favor of SIMD-0228, the proposal ultimately failed to reach the required 66.67% for approval.

SIMD-0228’s change in fortune came amidst record-breaking voter turnout, particularly from smaller validators. With the proposed dynamic emission schedule threatening to bankrupt the network’s smaller operators through reduced streaking rewards, validators raced to make their votes heard.

Onchain data tells a clear story. Validators with less than 500k $SOL in network stake were twice as likely to vote against the proposal than operators with over 500k $SOL, leading to a dramatic turnaround in results.

Despite the heated debate in recent weeks over the proposal SIMD-0228, opponents were stunned to overcome “big money” players.

According to smaller operators, the victory of a large number of “minnows” over a concentrated group of “whales” is a win for democracy and decentralization.

Historic Proposal a Great Success, Despite its Failure

Regardless of the result, both advocates and opponents of the proposal consider SIMD-0228 to be a great success for the network as a whole. 

For the first time in history, SIMD-0228 engaged network participants at all levels in network governance, resulting in record-breaking voter turnout.

With over 74% of network stake across 910 validators making their voices heard, SIMD-0228 co-author Tushar Jain has called the rejected proposal a “major victory for the Solana ecosystem.” 

Highlighting the staggering diversity of engagement from all corners of the network, Jain remarked that institutional players were more involved in SIMD-0228 than any previous proposal. 

Thought leaders across the ecosystem are more optimistic than ever about Solana’s future. SIMD-0228’s record-breaking participation indicates that network participants are profoundly invested in democratically making Solana the best it can be.

Validators Sell Votes: A New Meta?

Amidst the excitement, an imaginative validator found a clever way of putting their ‘undecided’ votes to use.

Toward the end of the voting epoch, the Solayer validator created a liquidity pool on Meteora to sell 10% of its voting tokens, with all proceeds from the sale going to $sSOL stakers.

Friedrice, a Solayer representative, stipulated that these voting tokens represent stakeholders who neglected to be involved in the discussion of governance. Instead of voting on their behalf, Solayer opted to create a market for these votes, redirecting profits to platform users.

Solayer’s vote tokens were ultimately purchased by SolBlaze, a long-standing validator, and used to vote against the proposal.

Speaking exclusively with SolanaFloor, Solayer co-founder Jason Li explained the protocol’s approach to representing its stakers:

“We conducted a stake-weighted random sampling survey of our stakers and decided to vote against the proposal. However, we left a small portion in favor, as it presents an interesting social experiment to start measuring the economic value of the vote—possibly a first in history. All proceeds from the sale went back to our sSOL staking pool.” - Jason Li, Solayer co-founder

Solayer’s bold decision to sell votes was an inventive way of rewarding stakers, but Li argues it could prompt further discussion around how governance proposals are orchestrated. When asked whether the sale of vote tokens could trigger a ‘vote-trading meta’ in future proposals, Li suggested that network participants reconsider the pertinence of public voting.

“Mitigation to the “vote-trading” is simple as not using visible voting. Maybe people should think more about whether this public voting is the best way of governance or on-chain democracy.”

Like many SIMD-0228 opponents, Li and Solayer believe that the proposal was harmful to smaller validators and could result in an imbalanced concentration of power and stake within the network.

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