Solana may adopt new voting model for inflation rates

Galaxy Research has introduced a proposal aimed at reforming how Solana (CRYPTO:SOL) validators determine future inflation rates for the network’s native token, SOL, after previous efforts failed to reach consensus.

The proposal, called Multiple Election Stake-Weight Aggregation (MESA), was unveiled on April 17 and is described by Galaxy as a “more market-based approach to agreeing on the rate of future SOL emissions.”

Unlike the current binary yes/no voting system, MESA would allow validators to express preferences across a range of possible deflation rates, with the final outcome determined by a weighted average of all votes cast.

“Instead of cycling through inflation reduction proposals until one passes, what if validators could allocate their votes to one or many changes, with the aggregate of ‘yes’ outcomes becoming the adopted emissions curve?” Galaxy explained.

The motivation for the new system comes from the earlier SIMD-228 proposal, which highlighted broad community agreement on reducing SOL inflation but failed to settle on specific parameters due to the limitations of binary voting.

SIMD-228 had suggested moving from a fixed inflation schedule to a dynamic, market-driven model, but consensus could not be reached.

Under the MESA proposal, the fixed terminal inflation rate of 1.5% would be retained, but validators could vote for multiple alternative deflation rates, with the average outcome adopted if a quorum is achieved.

An example provided by Galaxy illustrates that if 5% of validators vote for no change, 50% for a 30% deflation rate, and 45% for 33%, the new deflation rate would be set at the weighted average of 30.6%.

This approach is intended to allow for more nuanced decision-making, giving validators the ability to express preferences along a spectrum rather than being confined to binary choices, while still maintaining predictability through a fixed inflation curve.

“Galaxy Research seeks to suggest a genuinely alternative process to achieving what we believe is the community’s broad goal, and not necessarily proscribe any particular inflation rate outcome,” the firm said.

Currently, Solana’s inflation begins at 8% annually and decreases by 15% each year until it reaches the 1.5% terminal rate, with the network’s inflation rate now at 4.6% and nearly 65% of supply staked.

 At the time of reporting, the Solana (SOL) price was $135.09.