The encircled arrow was unveiled on 19 October 1980, two months after the Singapore Democratic Party (SDP) was founded. The circle symbolises unity amongst Singapore's ethnic groups, the arrow represents progress towards democracy and socialism in Singapore and the red colour signifies courage and determination.

According to interviews with Chiam and his wife, the logo was one of three presented by SDP member Abu Bakar bin Ahmat. They added that the arrow was inspired by the "rocket" logo of Malaysia's opposition party, the Democratic Action Party, while the circle helped to soften the design that some thought looked revolutionary. The red and white also matched the national colours of Singapore.