Galaxy proposes new 'market-driven' voting system for Solana emissions following SIMD-228 rejection

Galaxy Research proposed a new "market-driven" voting approach for deciding Solana's future emissions curve, following the community's previous attempt to adjust SOL's inflation issue.

The proposal, dubbed "Multiple Election Stake-Weight Aggregation (MESA)," suggests that validators vote across a spectrum of options, indicating different levels of support for a steeper deflation rate instead of a traditional yes, no or abstain.

If "yes" votes satisfy the required number, MESA would decide on an outcome based on the weighted average of the varying rates linked to different types of "yes" votes.

"Instead of throwing darts until the community is happy with an individual proposal, it is more efficient to simply ask each person what they want and settle on the aggregate," Galaxy said.

MESA appears to address the discussion that followed SIMD-228, a proposal introducing a dynamic, deflationary emissions model that adjusts token issuance based on staking participation. Despite a record-setting voter turnout, SIMD-228 failed to pass due to polarized votes.

Galaxy said the binary voting system could not adequately capture voter preferences for SIMD-228, even though the community appeared to agree that SOL inflation and security overpayment should be reduced on some level.

Meanwhile, unlike SIMD-228, MESA keeps the existing disinflationary curve that adjusts over time and is applied every epoch with a scheduled annual reduction.

According to data from Solana Compass, Solana currently has an initial inflation rate of 8%, reduced by 15% each year with a target rate of 1.5%. Solana’s current inflation rate is 4.6% with 64.7% of the total supply currently staked.

Limitations

In response to Galaxy's proposal, Max Resnick, lead economist at Solana-focused development firm Anza, said MESA would lead to "a lot of headaches" in the voting process.

"Suppose I believe the best policy is 25% a year — How should I vote to make the resulting policy as close to 25% as possible?" Resnick wrote in a comment to the proposal. 

Resnick said that while voters would ideally express their preferences truthfully, in reality, participants tend to predict the likely outcome and vote for the extreme option to move the average in their preferred direction.

The researcher said he continues to support a dynamic, market-based approach to SOL issuance, as proposed by SIMD-228. "A dynamic issuance curve is more secure in bad times and less costly in good times than a static curve," Resnick said.

Nonetheless, Resnick agreed with the direction of offering voters a broader set of options, as it would likely lead to less polarizing outcomes.

"Yes/No voting forces people into separate camps which creates unproductive conversations," Resnick said. "People inevitably focus more on 'winning' than on helping Solana win."

Solana Labs Co-founder Anatoly Yakovenko, on the other hand, suggested picking the median stake weighted, instead of the proposed weighted average.