As the countdown to Solana network’s voting on its groundbreaking token economy changes drew near, a pivotal shift emerged. The U.S.-based cryptocurrency exchange, Kraken, reversed its stance, offering support to a deflation-focused proposal. This last-minute change adjusted the power dynamics between major validators and the community just before the vote concluded.
Did Kraken Alter the Landscape?
Yes, Kraken’s significant move reshaped the landscape. Two separate proposals were presented to developers for voting. The main one, SGP 0002, aimed to increase the pace of inflation reduction from 15% to 30%, significantly limiting SOL supply growth. Should it pass, the issuance of 18.9 million SOL would be reduced, targeting an ultimate inflation rate of 1.5% by 2029.
Initially, Kraken, alongside Figment, Everstake, and P2P.org, opposed the reform, largely to preserve staking yields. Yet, as retail investors’ discontent grew, mounting pressure led Kraken to switch their official vote from no to yes.
Kraken’s last-minute support highlights the community’s profound influence on major validators in one of Solana’s most critical votes.
What Was the Support Threshold?
The voting participation rate was 60.17%, surpassing the required third for a valid quorum. However, support for SGP 0002 reached only 65.15%, representing 169.91 million SOL. The threshold needed for approval stood at two-thirds, or 66.67%.
As it stands, the support faction falls short of the mandatory acceptance benchmark by 1.52 points, with the opposition accounting for 25.39%, representing 66.22 million SOL. Abstentions amounted to 9.47%, equating to 24.69 million SOL.
Despite a majority being in favor, SGP 0002 hasn’t yet reached the necessary two-thirds passing threshold.
Was the Second Proposal Successful?
No, the secondary proposal, SGP 0003, did not succeed. It aimed to dramatically increase the burn rate of SOL from transaction fees daily. With major validators largely abstaining, the proposal’s acceptance became improbable, leading to its formal failure.
Helius CEO Mert Mumtaz called on Anatoly Yakovenko, Solana’s co-founder, to galvanize the remaining validators. Helius is a tech firm providing infrastructure and developer tools to the Solana ecosystem.
What Are the Steps for Implementation?
- SGP 0002 proponents might win, but changes won’t be immediate.
- The referendum only grants political authorization.
- The implementation requires the application of a technical update, SIMD 0550.
- Coordination among validators is necessary, anticipating at least a 4.5-month process.
Secure passage of the vote grants political power, but immediate execution is not automatic. Technical updates, such as SIMD 0550, are crucial. As Solana’s community anticipates a possible deflationary era, careful coordination is required for any successful implementation.
