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Crypto: Solana validators capture all priority fees

Wed 29 May 2024 ▪ 3 min of reading ▪ by Luc Jose A.
Getting informed Blockchain

Solana, one of the most promising blockchains in the crypto industry, has just experienced a decisive moment. Validators approved a key proposal on priority transaction fees, radically modifying the distribution of these fees. This decision, while largely supported, also sparked significant controversies within the community.

Crypto : Les validateurs de Solana raflent les frais prioritaires

Approval of Proposal SIMD-0096 by Solana Validators

Solana validators recently voted on the proposal SIMD-0096. 77.77% of the voters supported this proposal. This crucial change implies that 100% of the priority fees will now go directly to validators, up from just 50% previously.

Among the validators who supported this proposal are influential entities such as Helius, Jito, Everstake, Solend, and Stakehaus, who believe that this modification will enhance the security and efficiency of the network by increasing the financial incentives for validators. According to them, this redistribution of fees will motivate validators to maintain the robustness and performance of the Solana blockchain.

The proposal SIMD-0096 also aims to correct the dysfunctions of the previous model, which, according to supporters, encouraged side deals harmful to the network’s integrity. Tao Stones, the creator of the proposal, explained that the previous model allowed informal arrangements that could compromise the security of the Solana network. By directing all priority fees to validators, the proposal seeks to ensure a more transparent and equitable distribution of incentives while reducing the risks of dubious practices among participants.

A Proposal Approved, but Contested by Some Validators

Despite the majority approval of proposal SIMD-0096, several Solana validators expressed notable reservations. Among the opponents, Orangefin Ventures stood out by voting against the proposal. According to this validator, SIMD-0096 should have been accompanied by proposal SIMD-0123, which facilitates a more automatic and equitable distribution of fees to stakers.

Orangefin Ventures justified its vote by stating: “The reason we voted no is that we want SIMD-0096 to be accompanied by SIMD-0123 so that validators can distribute the priority fees to stakeholders within the protocol.”

In addition to concerns about transparency and fairness, opponents fear that this new reallocation of fees could lead to an increase in the inflation of SOL crypto. Priority fees, which will no longer be burned, could potentially increase the total supply of SOL crypto, thereby causing devaluation. Users like FreedomFighter have expressed their concerns, saying that “every user will suffer from higher inflation.”

These disagreements highlight the ongoing challenges the Solana community faces. It must balance incentives for validators while ensuring the network’s economic stability.

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Luc Jose A. avatar
Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d'une certification consultant blockchain délivrée par Alyra, j'ai rejoint l'aventure Cointribune en 2019. Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l'économie, j'ai pris l'engagement de sensibiliser et d'informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu'elle offre. Je m'efforce chaque jour de fournir une analyse objective de l'actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.