Galaxy Research Proposes Voting Overhaul to Curb Solana Inflation

Background: The SIMD-228 Proposal

The SIMD-228 proposal, spearheaded by Multicoin Capital partners Tushar Jain and Vishal Kankani, with contributions from Anza's Lead Economist Max Resnick, sought to transition Solana's fixed token issuance model to a dynamic, market-driven system. The proposal aimed to adjust SOL's inflation rate based on staking participation, potentially reducing it from 4.5% to approximately 0.87%.

Despite significant community engagement, with 74% of the staked supply across 910 validators participating, the proposal fell short of the required 66.67% approval, securing only 61.4%. This outcome highlighted the challenges of achieving consensus on complex economic adjustments within decentralized networks.

Introducing MESA: A New Voting Mechanism

Galaxy Research's MESA proposal aims to address the shortcomings of previous voting mechanisms by allowing validators to vote on multiple deflation rate options. Instead of a binary 'yes' or 'no' vote, validators can express preferences across a range of options, with the final outcome determined by a weighted average of these votes.

This approach is designed to capture a broader spectrum of validator preferences, potentially leading to more balanced and representative decisions regarding SOL's inflation rate. MESA maintains the terminal inflation rate at 1.5% but offers a more flexible path to reach it, based on collective validator input.

Community Reactions and Concerns

The introduction of MESA has elicited mixed reactions within the crypto community. Some stakeholders appreciate the move towards a more democratic and market-driven approach, viewing it as a step forward in decentralized governance.

However, others express concerns about the potential complexity and the burden it might place on validators. Tushar Jain, co-founder of Multicoin Capital, voiced skepticism about the MESA proposal, arguing that it would place too much burden on everyday stakers—people who lock up their SOL to support the network in exchange for rewards. He believes most stakers prefer a simpler system, such as a one-time vote or automated adjustments based on network demand.

Despite the criticism, Solana co-founder Anatoly Yakovenko has shown interest in the proposal, suggesting that vote outcomes be weighted based on the size of each participant's stake. This would ensure that those with the most at risk have a stronger say in the network's economic future.

The Road Forward

As the Solana community continues to explore avenues for sustainable growth and stability, the MESA proposal represents a significant step in reimagining governance structures to better align with the network's evolving needs. Whether MESA gains enough traction to replace the current system, or at least improve on it, will depend on how validators and stakeholders respond in the coming weeks.

For now, Solana continues to evolve, with its community actively shaping the future of the network's economy.