Chainflow will be splitting our SIMD-0228 vote -
70% No
30% Yes
We’ve been quite active in this proposal’s discussion in Discord and on X, including hosting this SIMD-0028 space.
You can see how our thinking has evolved by reading through this X thread and this one.
Search for me in #mb-planning in the Solana Tech Discord @cfl0ws to follow my comments there.
We appreciate the authors putting forth this proposal. We feel hopeful to see the governance process, which we’ve been working hard to help shape for the past 18 months really gain momentum with this proposal.
We also feel optimistic as this vote has caused some validators to begin recognizing the importance of direct staker participation in the governance process. This is something we’ve advocated for since the first governance vote was held to decide who votes in the governance process.
And while we agree in principle that emissions should be reduced, eventually, we feel the right move, right now, is to vote mainly no. We welcome an opportunity to continue discussing a new yet similar proposal, either now or in the future that addresses the concerns we have been unable to resolve to-date related to SIMd-0228 in its present form.
Our thoughtful consideration of the information presented related to this SIMD, most heavily weighting data, our 7+ years in the staking economy and reflecting on Chainflow’s values, while considering various third-party perspectives has led us to this decision for the following primary reasons -
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We agree that inflation is intended to bootstrap a network to viability, it’s intended to be replaced by usage fees. In fact, Solana is the first network we’ve come across, after operating on many mainnets and even more testnets through the years, that has progressed to the point of generating non-negligible usage fees. This is a significant accomplishment that shouldn’t be overlooked.
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However we are strong advocates for decentralization and believe Solana can be doing better in this regard. We have concerns that this proposal can adversely impact the viability of independent validator operators. We believe independent operators are an essential component of a healthy validator set and network. In fact, we see an inverse correlation between stake weight and contributions, i.e. higher staked validators are typically net extractors, while lower-staked validators are net contributors.
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Furthermore, because all validator income streams are proportional to stake, a consistent reduction of inflationary fees hits smaller operators with smaller margins harder than their higher (many times by order of magnitude) staked counterparts.
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Reducing vote fees should happen in conjunction with any proposal to reduce inflation. While that proposal has been released, we feel there should be a tighter coupling between the two, given the unpredictability of feature activation timing.
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While the proposal states Solana is paying too much for security, nobody has been able to clearly answer the question of how much Solana should be paying for security or even a technique to measure and determine what the right level of security is. Network security isn’t something to FAAFO about.
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We still haven’t heard a compelling reason as to why inflation reduction needs to happen now. We’re concerned that either there is information we are unaware of that is driving this urgency or that the sunk-cost fallacy may be powering the perception that there needs to be a rush to get this done and it needs to be done now.
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We do remain concerned stakers may undelegate, sell their SOL and move to another chain where they can milk a higher yield. We are aware of a number of otherwise zombie chains that stakers and validators sit on to milk whatever remaining liquidity is available, taking advantage of inflation rates significantly higher than they are able to receive on Solana, even at today’s emission rate.
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This concern is compounded by a limitation of the current governance system in that makes it very difficult for stakers to directly participate in the voting process. We have been advocating for direct staked participation since this governance process development was initiated and feel encouraged to see a number of validators who were previously against this beginning to change their minds.
We will not vote until epoch 754. If any of our delegators would like to discuss this SIMD and/or our voting decision, we encourage you to contact us at simd0028@chainflow.io