{"id":475280,"date":"2025-04-17T21:30:10","date_gmt":"2025-04-17T20:30:10","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=475280"},"modified":"2025-04-18T01:25:27","modified_gmt":"2025-04-18T00:25:27","slug":"galaxy-proposes-consensus-method-to-address-solana-inflation-debate","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/galaxy-proposes-consensus-method-to-address-solana-inflation-debate\/","title":{"rendered":"Galaxy proposes consensus method to address Solana inflation debate"},"content":{"rendered":"<p><span style=\"font-weight: 400;\"><a href=\"https:\/\/cryptoslate.com\/companies\/galaxy-digital\/\">Galaxy<\/a> Research has submitted a new proposal to the Solana (<a href=\"https:\/\/cryptoslate.com\/coins\/solana\/\">SOL<\/a>) community to reform the network\u2019s inflation governance discussion through a method called Multiple Election Stake-Weight Aggregation (MESA), according to a<\/span> <strong><a href=\"https:\/\/github.com\/solana-foundation\/solana-improvement-documents\/discussions\/279\">filing<\/a><\/strong><span style=\"font-weight: 400;\"> published on April 17.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The mechanism seeks to introduce a market-driven process to refine the SOL emissions curve without relying on single-outcome votes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The proposed method would not change Solana\u2019s ultimate goal of reaching a 1.5% terminal inflation rate but could substantially accelerate the timeline, depending on the outcome of the community\u2019s vote.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to Galaxy\u2019s projections, maintaining the current 15% deflation rate would see the network reach its terminal rate around epoch 2,135, approximately 7.4 epoch years from epoch 772. Steepening the deflation rate would bring this point closer.<\/span><\/p>\n<h2><strong>Addressing inflation<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Concerns about Solana's inflation have further intensified this year. The network\u2019s <\/span><strong><a href=\"https:\/\/cryptoslate.com\/sol-inflation-leaps-30-one-week-after-changes-in-fee-distribution-model\/\">annualized inflation rate rose by 30.5%<\/a><\/strong><span style=\"font-weight: 400;\"> after implementing a new priority fee distribution mechanism under Solana Improvement Document 96 (SIMD-96), approved in May 2024.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This change redirected all priority fees to validators instead of burning half, which reduced the daily Solana burn from nearly 18,000 SOL to around 1,000 SOL.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Under the current Solana system, inflation follows a fixed, time-dependent curve that targets a 1.5% terminal inflation rate. However, Galaxy noted that prior votes, such as Solana Improvement Document 228 (SIMD-228), revealed challenges in reaching a consensus on adjusting parameters despite broad agreement that inflation is higher than necessary.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">SIMD-228 proposed dynamic inflation adjustments based on staking participation and was<\/span> <strong><a href=\"https:\/\/cryptoslate.com\/solana-governance-sets-new-participation-record-outpacing-past-us-presidential-elections\/\">ultimately rejected<\/a><\/strong><span style=\"font-weight: 400;\"> on March 14. It secured 61.39% approval, falling short of the 66.67% threshold required for passage.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Helius Labs CEO Mert Mumtaz commented that the vote highlighted the need for better governance tools. At the same time, <a href=\"https:\/\/cryptoslate.com\/companies\/solana-labs\/\">Solana Labs<\/a> co-founder <a href=\"https:\/\/cryptoslate.com\/people\/anatoly-yakovenko\/\">Anatoly Yakovenko<\/a> argued for the importance of active validators over passive staker participation.<\/span><\/p>\n<h2>MESA system<\/h2>\n<p><span style=\"font-weight: 400;\">The new Galaxy proposal offers an alternative path by letting validators select from multiple predetermined deflation rates, with the outcome determined through a weighted average of these votes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The MESA system would present validators with a range of &#8220;yes&#8221; options, such as 15%, 17.5%, 20%, and 25% deflation rates, in addition to the standard &#8220;abstain&#8221; and &#8220;no&#8221; choices.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Each validator would allocate their stake-weighted votes accordingly. If the &#8220;yes&#8221; votes meet the quorum and minimum threshold, it will trigger a calculation of the new deflation rate as the weighted average across all &#8220;yes&#8221; selections.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This approach aims to preserve predictability while allowing validators to express a wider range of preferences in a single process. T<\/span><span style=\"font-weight: 400;\">he research team also clarified that the filing is intended to suggest a governance framework and not advocate for any particular inflation rate.<\/span><\/p>\n<h2><strong>Tiered decision<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">Instead of dynamically adjusting inflation based on real-time metrics, the MESA vote would enforce a fixed disinflationary trajectory, with the rate adjusted based on the collective input of validators once it is ratified.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The proposal also outlines several implementation questions for the Solana community to address.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These include determining how granular the spectrum of \u201cyes\u201d votes should be, whether to apply the existing 33% quorum and two-thirds supermajority thresholds from SIMD-228, and whether a simple weighted average is the most appropriate calculation method.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Furthermore, Galaxy's filing presents various hypothetical voting outcomes to illustrate the process. In one example, if 5% of YES votes select to maintain the current 15% deflation rate, 50% choose a 30% deflation rate, and 45% opt for a 33% deflation rate, the new effective rate would be 30.6%.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The system allows validators to express nuanced preferences while avoiding the inefficiencies of repeated binary votes.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Galaxy Research has submitted a new proposal to the Solana (SOL) community to reform the network\u2019s inflation governance discussion through a method called Multiple Election Stake-Weight Aggregation (MESA), according to a filing published on April 17.\u00a0 The mechanism seeks to introduce a market-driven process to refine the SOL emissions curve without relying on single-outcome votes. [&hellip;]<\/p>\n","protected":false},"author":1511,"featured_media":475316,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,77968,79325,37],"tags":[],"prediction_market_topic":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Galaxy proposes consensus method to address Solana inflation debate<\/title>\n<meta name=\"description\" content=\"The new tiered decision method aims to solve the consensus issue regarding SOL&#039;s increasing annualized inflation rate.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/galaxy-proposes-consensus-method-to-address-solana-inflation-debate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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