Solana validator revenue is about to jump, but stakers might miss out
The post Solana validator revenue is about to jump, but stakers might miss out appeared on BitcoinEthereumNews.com.
This is a segment from the Lightspeed newsletter. To read full editions, subscribe. Solana’s validators are about to see a major income bump, but the protocol lacks a way for them to share the wealth with their stakers. In May, Solana validators passed a proposal to send 100% of priority fees — which are extra funds users can pay for a better chance of landing their transactions — to validators. The proposal’s implementation now seems imminent, but some are calling for Solana to pump the brakes until validators are able to share the extra fees with stakers. Validators, who run Solana’s software and create blocks in the Solana blockchain, currently receive half of SOL-denominated priority fees, and the other half is burned, or effectively removed from circulation. This leads some validators to strike side deals with users, since a user paying 75% of the priority fee directly to the validator outside of the Solana protocol would benefit both parties, for instance. Named SIMD-0096, the May proposal aims to end these side deals. But Solana lacks an in-protocol way for validators to share priority fees with stakers — who delegate their SOL to validators for a share of the validator rewards — so the increased SOL inflation would essentially benefit validators at the expense of everyone else. Some Solana developers have argued that SIMD-0096 could incentivize priority fee spoofing, or validators artificially raising priority fees to take home more rewards. Still, the change is being implemented. Solana priority fees totaled some $240 million in January, according to Blockworks Research. Implementing SIMD-0096 would have increased Solana’s real economic value, a Blockworks Research metric for blockchain value accrual, by roughly 22% last month. A newer proposal, SIMD-0123, would give validators the ability to directly share priority fees with stakers. As things stand, this…
Filed under: News - @ February 6, 2025 3:27 pm