- The number of validators on Solana is in decline.
- Supporters argue the network is stronger without those who have left.
- The overall number of validators may not be the most important factor.
Solana is shrinking.
The number of validators, entities running the blockchain’s distributed network, has fallen from a peak of around 2,500 in early 2023 to less than 900 today — a 64% drop.
Yet according to some of Solana’s most ardent supporters, the steep decline isn’t a problem.
It may even be a good thing.
“These validators were using underperforming hardware, which prevented them from keeping up with Solana’s growth,” Tomas Eminger, chief infrastructure officer at RockawayX, a Solana ecosystem investor, told DL News.
“We are actually happy to see the network thriving without these validators, which were only a bottleneck,” Eminger said.
Most blockchains pride themselves on having more validators because it helps increase their security, resilience, and censorship resistance.
But supporting a large set of validators can be difficult. Those running the vital infrastructure don’t do it for free. They need to be incentivised — usually through rewards of valuable tokens — to keep running and processing transactions.
If the costs of doing so outweigh the rewards, validators start to shut down.
Subsidies dry up
One reason for the drop in validators is that the Solana Foundation, a nonprofit that supports development on the blockchain, has reduced the amount of SOL tokens it loans to validators, Max Kaplan, chief technical officer at SOL Strategies, a Solana treasury company, told DL News.
To keep in sync with the rest of the network, Solana validators need to submit thousands of transactions daily, which they must pay for out of pocket. If a validator doesn’t stake enough SOL tokens to generate a staking yield higher than the cost of these transactions, it isn’t economically viable to run.
To address this, the Solana Foundation runs a programme that loans lump sums of SOL tokens to validators to help them earn enough rewards to offset these transaction costs.
In April, the foundation began removing three validators from its delegation programme for every new one it onboarded in a bid to decrease the number of validators that rely on it.
At the time, many Solana supporters praised the move as it promised to make the network more decentralised by reducing the Solana Foundation’s influence.
Malicious validators
It’s not just uneconomical validators that are leaving.
“Many of the validators who left were either low-quality or malicious, so overall network reliability improved despite the smaller set,” Dillon Liang, co-founder of Blueprint Finance, the developer behind Solana DeFi protocol Glow Finance, told DL News.
“This is largely due to the fact that stake pools have managed malicious sandwichers more proactively,” Kaplan said.
Kaplan and Liang refer to validators that allow sandwich attacks — front-running transactions conducted by trading bots that profit at the expense of other traders. They argue that removing such validators is beneficial to the network because it reduces the likelihood of user exploitation.
Sandwich attacks are a perennial problem on Solana. Users have previously paid millions of dollars in additional transaction fees to prevent sandwich attack bots from targeting their transactions.
Concentration risk
Others argue that the overall number of validators isn’t the most important factor.
“What is actually important is the geographical spread of nodes around the planet,” Eminger said.
When blockchain validators are spread out across different parts of the world, it helps protect the network from localised issues.
Analysts have warned that a high concentration of validators running on cloud providers such as Amazon Web Services servers poses a significant risk. If a server location or provider experiences an outage or technical difficulties, it could severely impact a blockchain with a large number of its validators hosted there.
The drop in Solana validators doesn’t appear to have impacted the network’s geographical distribution, however.
Just over 30% of validators are located in the US. The network is split across dozens of web hosting providers, with the largest accounting for just over 18% of validators, according to Rated, a blockchain validator data provider.
Solana’s coming Alpenglow upgrade will also lower operating costs for validators, potentially helping new ones join the network and increasing diversity.
Again, the number of validators just isn’t a big concern.
“The focus should instead be on improving the quality of active validators rather than only concerning ourselves with quantity,” Kaplan said. “I don’t think there’s any investor out there that would value Solana greatly more if it had 1,000 validators over 500.”
“500 is orders of magnitude better than one, which is the world of traditional finance.”
Tim Craig is DL News’ Edinburgh-based DeFi correspondent. Reach out to him with tips at tim@dlnews.com.
