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Why SOL Holders Voted Down Reducing SOL’s Inflation Rate
Even though 61% voted YES, the proposal fell short of the supermajority needed to pass. Was this a mistake?
Juan Aranovich
March 14, 2025
The proposal to significantly reduce Solana's inflation didn’t pass. Multicoin Capital’s Tushar Jain, one of the authors of the SIMD-228 proposal, explains why it failed and what it means for the future of Solana.
The Solana ecosystem just completed a critical governance vote. SIMD-228, a proposal to tie Solana’s inflation rate to its staking participation rate, was put forward by Multicoin Capital and Anza, but despite a majority voting in favor, it failed to meet the required supermajority to pass.
Tushar Jain, co-founder and managing partner at Multicoin Capital, who co-authored the proposal, joins the show to discuss:
Why he believes the proposal was necessary
Whether inflation is too high for Solana’s long-term health
If some validators voted against their own interests
The silver lining of the governance process
Why a smaller proposal focused fee sharing did pass
Whether Multicoin Capital will resubmit a revised proposal
Listen to the episode on Apple Podcasts, Spotify, Pods, Fountain, Podcast Addict, Pocket Casts, Amazon Music, or on your favorite podcast platform.
Now, let’s get into this week’s news! In today’s edition:
🏦 Trump family eyes Binance.US stake—but CZ says not so fast.
✂️ Trump officially ends Operation Choke Point 2.0 for crypto.
🚀 Senator Lummis wants America to buy $80B worth of bitcoin.
⚖️ The House just shot down the IRS’s DeFi broker tax rule.
❌ OKX denies it’s under EU scrutiny after Bybit’s mega-hack.
💸 Hyperliquid loses millions after whale’s huge ETH trade collapses.
🥪 Trader swaps $733K for $19K in bizarre Uniswap sandwich attack.
📈 Cboe wants Fidelity’s Ethereum ETF to start staking ETH.
💰 Abu Dhabi’s MGX just made a landmark $2B Binance bet.
🗳️ Binance lets users vote tokens on—and off—the exchange.
😜 Bitcoin whale pulls epic disappearing act, frustrating FBI seizure.
President Trump’s family has reportedly considered acquiring a stake in Binance’s U.S. branch, coinciding with founder Changpeng Zhao’s (CZ) attempts to secure a pardon from Trump’s administration, according to The Wall Street Journal.
According to reporting from Unchained, the negotiations blindsided Binance.US’s current leadership, citing a source close to the situation. “Management has no connectivity to CZ,” said the source. “They have no idea what he is doing.”
Zhao previously served four months in prison after pleading guilty in 2023 to charges linked to Binance’s anti-money-laundering violations. The potential investment could involve World Liberty Financial, a crypto venture backed by Trump and his ally Steve Witkoff.
However, CZ denied the claims via social media, writing: “The WSJ article got the facts wrong,” adding, “I have had no discussions of a Binance US deal with… well, anyone.” CZ characterized the report as an attempt to attack crypto and President Trump, though he humorously acknowledged, “No felon would mind a pardon.”
At last week’s White House Crypto Summit, President Trump announced that he’s officially ending “Operation Choke Point 2.0,” referring to allegations that previous regulators deliberately limited crypto companies’ access to banking services. The summit brought together crypto industry leaders and federal officials to address concerns around restrictive financial regulations.
Immediately following Trump’s announcement, the Office of the Comptroller of the Currency (OCC) revised its crypto-related guidelines. Acting Comptroller Rodney E. Hood clarified that banks no longer need prior OCC approval for handling cryptocurrency custody or stablecoin payments, emphasizing that banks can now apply their standard risk assessment procedures.
Hood stated, “Today’s action will reduce the burden on banks to engage in crypto-related activities.” The new guidance marks a significant shift, easing restrictions previously imposed in November 2021.
Senator Cynthia Lummis (R-WY) reintroduced her BITCOIN Act on Tuesday, proposing that the U.S. government buy one million bitcoin, worth approximately $80 billion, over the next five years. This legislation goes beyond President Trump’s recent executive order creating a Strategic Bitcoin Reserve by setting clear parameters for acquisition and long-term storage.
Under Lummis’s proposal, the U.S. Treasury would finance these purchases using profits from the Federal Reserve’s gold reserves. The bitcoin acquired would be securely stored across decentralized, government-operated vaults nationwide, and must be held for at least 20 years.
“By transforming the president’s visionary executive action into enduring law, we can ensure our nation will harness the full potential of digital innovation,” said Lummis.
Five Republican senators co-sponsored the bill, with companion legislation introduced in the House.
The U.S. House of Representatives voted 292-132 to repeal an IRS rule requiring decentralized finance (DeFi) platforms and other crypto entities to act as brokers, collecting detailed taxpayer and transaction data. The resolution, introduced under the Congressional Review Act, overturns a Biden-era regulation finalized in December 2021. Proponents argued that DeFi platforms lack the infrastructure needed to comply, with Rep. Jason Smith (R-Mo.) stating, “DeFi platforms do not and cannot even collect the information from users needed to implement this rule.”
However, critics such as Rep. Lloyd Doggett (D-Texas) called the repeal “special interest legislation,” suggesting it could aid tax evasion and illicit financing. The Senate, which previously approved a similar measure, must pass it again before sending it to President Trump, who is expected to sign it into law.
OKX, one of the largest cryptocurrency exchanges, has denied reports claiming it is under investigation by European regulators for allegedly facilitating the laundering of $100 million from the recent $1.5 billion Bybit hack. According to Bloomberg, European regulators are examining OKX’s decentralized Web3 services under the Markets in Crypto-Assets (MiCA) framework, questioning whether its permissionless wallet tools were misused by North Korea-linked hackers.
OKX founder Star Xu denied the allegations on social media, calling the claims a misunderstanding and blaming Bybit’s own insufficient security protocols. “Our Web3 wallet services are no different than those provided by other industry players,” OKX stated, emphasizing that it actively blocks IPs from prohibited regions.
Meanwhile, Bybit CEO Ben Zhou detailed how the North Korean hackers converted their stolen ether into bitcoin, noting that attackers primarily converted stolen Ethereum through various cross-chain bridges, rather than exclusively via OKX. European regulators are reportedly considering actions including revoking OKX’s MiCA license, pending further investigation.
Hyperliquid, a perpetuals trading platform, reported a $4 million loss after a trader executed a highly leveraged trade involving more than $200 million worth of Ethereum (ETH). Initially, the trader deposited $4.3 million in USDC as collateral, opening a 50x leveraged long position totaling 113,000 ETH.
As the trade generated nearly $8 million in unrealized profits, the user withdrew part of their collateral, triggering liquidation. Hyperliquid’s automated market-making vault (HLP) was forced to absorb the large liquidation at unfavorable prices, resulting in $4 million in losses due to price slippage. The trader ultimately walked away with approximately $1.8 million in profit.
Hyperliquid clarified there was “no protocol exploit or hack,” but acknowledged the risk inherent in automated strategies. The platform has since reduced maximum leverage for Ethereum to 25x to mitigate similar future risks.
A cryptocurrency trader suffered a significant loss on Wednesday after swapping roughly $733,000 of stablecoins for only about $19,000 in USDT due to an apparent “sandwich attack” on Uniswap V3’s stablecoin liquidity pool. Onchain analysts noted that an automated MEV (maximal extractable value) bot withdrew liquidity just before the trader’s transaction, drastically skewing the price between two stablecoins pegged to $1.
DeFi analyst Michael Nadeau explained the attacker “front-ran the trader’s transaction,” causing the victim to lose about $714,000 in a single trade. Speculation quickly arose online, with DeFi researcher TheDEFIac observing an “unusual path” for funds before the attack, suggesting it could potentially be linked to money laundering. Another analyst proposed the loss could be intentional, designed specifically as an indirect laundering technique, though the actual motive remains unclear.
Cboe BZX Exchange has requested regulatory approval to allow staking services within Fidelity’s Ethereum ETF, known as FETH. According to a recent filing with the U.S. Securities and Exchange Commission (SEC), the proposed rule change would enable Fidelity to stake part or all of the Ethereum held by its fund through selected staking providers. This staking would generate additional returns for investors, currently around 3.3% annually in ETH rewards, treated as income by the ETF.
Since its approval last July, Fidelity’s Ethereum ETF has become one of the largest Ethereum ETFs, managing nearly $1 billion despite recent market declines. Previously, staking wasn’t permitted in approved Ethereum ETFs, a strategy that helped secure regulatory acceptance. Similar proposals are pending for Grayscale and 21Shares ETFs. The SEC must still review and approve the rule change before Fidelity can implement staking.
Binance received a $2 billion investment from MGX, an Abu Dhabi-based technology investment firm, marking Binance’s first-ever institutional funding. The transaction, conducted in stablecoins, grants MGX a minority stake in Binance and represents MGX’s first investment in the cryptocurrency sector.
MGX Managing Director Ahmed Yahia stated: “MGX’s investment in Binance reflects our commitment to advancing blockchain’s transformative potential for digital finance.”
Binance, currently the world’s largest cryptocurrency exchange with daily trading volumes exceeding $20 billion, already employs around 1,000 staff in Abu Dhabi. The partnership aims to enhance innovation in AI, blockchain, and financial technologies.
“The transaction will be 100% in crypto (stablecoins), marking it the largest investment transaction done in crypto to date,” added Binance founder CZ.
Also this week, Binance introduced a new community-driven governance model, allowing users to directly influence which tokens get listed on the platform. Projects selected by Binance from its “community observation list” will now undergo public voting, with top-voted tokens being considered for listing after additional due diligence.
Users also have the power to vote on delisting tokens that are inactive, pose investment risks, or fail to provide sufficient transparency.
A man named Juan Carlos Reynoso just gave a masterclass in avoiding bitcoin seizure, moving nearly $10 million in BTC with lightning-fast precision after the government ordered him to surrender it. Court documents called his speedy maneuvers “frenzied,” executed with “intuition more accurate than the Oracle at Delphi.”
Unfortunately for Reynoso, psychic skills aren’t recognized in court—he now faces fines or jail unless he returns the funds, along with a fine of $10,000 per day.
