Solana is a high-performance blockchain that aims to compete with Ethereum. It combines proof of stake (PoS) with proof of history (PoH) as a consensus method.
One X user, @arixon.eth, alleges that more than 90% of Solana validators are heavily subsidized by the Solana Foundation and Alameda Research, the defunct trading wing associated with the bankrupt cryptocurrency exchange FTX. in a post On Oct. 4, the analyst said the level of subsidization is “shocking,” but will come to “hurt SOL prices in the long run.”
Are Solana Validators Heavily Subsidized?
TradingView validators play a crucial role in Ethereum’s architecture, verifying the validity of transactions and adding them to the blockchain, while ensuring the network remains secure and decentralized.
A node must stake SOL to become a validator, and the amount of SOL staked determines the voting power or “voting keys.” Like miners, validators are rewarded SOL each time they validate a block within each epoch.
There are 1,997 Solana validators at the time of this publication. However, the analyst points out that of 1,997 validators, 1,818 received delegations from the Solana Foundation and Alameda Research. Solana validators have delegated 106 million SOL, of which 73 million are distributed from the Solana Foundation and 33 million from Alameda Research.
The analyst concludes that if it were not for the “strong” incentive, the count of Solana nodes, validators, would be much lower. @arizon.eth adds that Solana has many nodes only because “two centralized entities are giving free money to node operators.”
Due to this agreement, the analyst continues, the Solana Foundation “can manipulate node operators to do whatever they want if they do not want their participation withdrawn.” @arixon.eth further notes that many node operators do not have delegations from ordinary SOL holders.
Solana Co-Founder Responds, “Claim Participation is What’s Important, Not Validator Count”
Solana co-founder Anatoly Yakovenko has since responded to these accusations, saying that while approximately 2,000 validators, their nodes and voting keys secure the network, not their respective stake. In this statement,
Yakovenko emphasizes the importance of online voting and the meaning of the votes. Since all validators approve valid blocks simultaneously, their votes, not each other’s participation, are important to the security and stability of the network.
Every time a node withdraws SOL and claims staking rewards as well as possibly block validation rewards, its voting power is reduced.
Therefore, the network will depend on other validators for decentralization and security, regardless of each one’s participation. A Solana node operator explained that the distribution of online validators will play a critical role whenever this happens.
Meanwhile… Solana Foundation Highlights a 31% Participation through Jito Labs
The Solana Foundation recently unveiled an impressive milestone that highlights its continued progress. In its most recent report, the organization revealed that a staggering 31% of its shared network now passes through the Jito Labs client.
The number of validators opting for Jito has almost doubled since the last report in March. To put it in perspective, the Jito Labs client, first launched on the mainnet in August 2022, had 0% participation. In March 2023, that figure jumped to 16%. And now it has reached a remarkable 31%.
The Solana MEV infrastructure the company is building has attracted a lot of attention and big names like Solana Ventures, Anatoly Yakovenko, co-founder of Solana Labs, and Austin Federa, head of communications at the Solana Foundation, were present at the funding round.
By Audy Castaneda
