Solana Leaders Evaluate SIMD-0228 Following Rollout Extension

SIMD-0228 has become one of the Solana network’s most fiercely debated governance proposals, with representatives from both sides making compelling arguments.

In response to initial feedback, proposal co-author Vishal Kankani has slightly altered the SIMD-0228’s implementation rollout, should it be approved on March 6.

What has changed in the updated proposal, and what are the strongest arguments both fora nd against SIMD-0228?

SIMD-0228 Curve Rollout Now 50 Epochs

In the face of growing concerns from the Solana community, Vishal Kankani, Tushar Jain, and Max Resnick have made slight changes to the SIMD-0028 proposal. To allow sufficient time to assess the impact of the proposed new emission mechanism after deployment, the new curve’s rollout has been extended to 50 epochs, rather than 10.

Alongside the changes, Kankani also highlighted that SIMD-0228’s implementation will be unlikely to begin within 6 months. Including the 50 epoch rollout, the newly proposed $SOL emission schedule will not be fully operational until around one year from approval.

Changes to the implementation schedule come following fierce debate surrounding SIMD-0228. While some ecosystem leaders argue that the proposal “makes Solana stronger”, others believe it prices out smaller validators and discourages marginal buyers and institutions from taking positions in Solana.

Ecosystem Leaders Advocate for Reduced Inflation

SIMD-0228’s primary aim is to transform Solana’s emission schedule from a simple, steadily decreasing rate to a ‘smart’, dynamic market-based rate that adapts to network conditions. 

By changing to a programmatic rate, $SOL emissions are forecasted to be reduced by up to 80%. This change would dramatically reduce token inflation and, therefore, selling pressure from validators.

Anza Lead Economist and proposal co-author Max Resnick argues that Solana is overpaying for network security, with $SOL holders suffering at the expense of $SOL stakers through high inflation.

[http://x.com/MaxResnick1/status/1896316441869381914]

Combined with extractive tax laws in the United States and high commissions charged by CEX staking operations, Resnick contends that the existing model is a “leaky bucket” that costs the network hundreds of millions of dollars per year.

“If we want Solana to win, we cannot be pissing away hundreds of millions of dollars a year to governments and middle men.” - Max Resnick, Anza Lead Economist

Resnick is far from the only Solana ecosystem thought leader with this outlook. The Solana Foundation’s Head of Staking Ben Hawkins has reinforced Resnick’s ‘leaky bucket theory’ while suggesting that SIMD-0228 strengthens network security, reduces inflation, and improves validator sustainability.

To his credit, Anatoly Yakovenko has leveraged his platform to amplify arguments on both sides. However, the Solana co-founder has indicated that moving away from global inflation is a step in the right direction.

Notably, the discussion surrounding SIMD-0228 has initiated separate conversations regarding a potential reduction in vote fees, which could help smaller validators remain profitable despite reducing emissions.

Solana Foundation President Expresses Concerns

While most social media commentators agree that ‘unnecessary inflation’ is a problem, there are some compelling arguments to vote against SIMD-0028 on March 6. 

Proposal critics claim that SIMD-0228 is a threat to decentralization that could bankrupt smaller validators and discourage marginal buyers from entering the Solana ecosystem.

Reduced emissions will make it difficult for smaller validators to remain profitable after paying vote fees, effectively forcing many operators to shut down entirely. The death of smaller validators means that network stake will invariably flow to larger operators, which harms network decentralization in the long term.

Finality Capital Partner David Grider estimates that between 50 and 200 validators could be lost following SIMD-0228 implementation, further concentrating network stake and dropping Solana’s superminority.

Remarkably, not everyone within the Solana Foundation is aligned on SIMD-0028. Foundation President Lily Liu has been one of the proposal's staunchest opponents, arguing that SIMD-0028’s “yolo-economics” are unfavorable for marginal buyers and institutional investors looking for solid, reliable yield.

“The largest product for each of those [European] ETP providers is their $SOL staked ETP. And if you talk to them, why is that? It's very simple. It's because there's that yield… We're 1/4th, 1/5th, even 1/6th the market cap of Ethereum, and yet we're the No. 1 state ETP in Europe.” - Lily Liu, Solana Foundation President

While acknowledging there are good arguments to support SIMD-0228’s implementation, Liu calls upon voters to consider whether the proposal holistically benefits the ecosystem rather than rushing to support a proposal that solves one piece of a larger puzzle.

“Have we been system-thinkers rather than YOLO-thinkers about the way we approach our first economic policy upgrade in five years?”

Debate aside, the Solana community is thrilled that governance discussions are dominating mind-share. Unlike many past proposals, community members from across the ecosystem are actively engaging in the SIMD-0228 discussion, resulting in a more collaborative and accessible approach to network growth.

Even within the Solana Foundation itself, contrary opinions are being discussed and dissected on the public stage, helping to bring greater transparency and maturity to the ecosystem at large.

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