- Solana validators receive record tips via Jito platform.
- Tips incentivize prioritizing transactions for higher fees.
- Risks include sandwich attacks and similar activities.
As a high-performance blockchain, Solana relies on its validators to run the chain quickly and efficiently. However, to run Solana nodes, validators require complex and expensive hardware, which leads them to look for other options
One of the platforms enabling validators to extract as much money from their activities is Jito, which recently saw a peak in usage. However, some of the tactics validators use to make money have sparked concerns among both network users and the Solana Foundation itself.
Validator Tips on Solana’s Jito Protocol Reach Record
As Solana’s ecosystem is growing, so does validator revenue. On Wednesday, August 7, Solana validators on the Jito platform received a record-breaking 17,290 SOL in tips, valued at approximately $3.19 million.
Source: Dune
Tips come from the Jito MEV (Maximum Extractable Value) solution, which enables validators to earn additional revenue beyond just staking rewards. This is possible because the validators can decide which transactions come first in the block order.
These tactics, however, have come under criticism for their negative effects on network users. For one, they expose users to sandwich attacks, which involve placing a transaction right before and right after a user’s transaction. This enables the MEV bot to profit, which then tips the validator for making this possible.
MEV Tactics Come Under Intense Scrutiny on Solana
The adverse effects of MEV bots and sandwich attacks came under intense scrutiny earlier this year. On March 9, Jito shut down all its mempool services, which exposed users to sandwich attacks. This had an immediate and significant impact on the fees Jito validators were generating.
Later in May, the Solana Foundation assigned 100% of priority fees to validators, in order to make them less likely to engage in MEV tactics. This move faced criticism from the community, many of whom did not see how validators would be disincentivized to still engage in harmful tactics.
This was followed by action against validators engaged in sandwich attacks. On June 10, the Solana Foundation removed several of these validators from the Solana Foundation Delegation Program (SFDP), which provided them with staking subsidies. However, these validators continued to earn fees through staking.
On the Flipside
- Restaking is another option validators can use to maximize their revenue. Other than extracting more value from network users, restaking enables validators to profit from securing multiple protocols.
Why This Matters
The recent developments in the Solana ecosystem highlight the ongoing challenges in maintaining a secure and sustainable blockchain network. While validators are crucial to maintaining the network’s operation, they have to treat all its users equally.
Read more about Solana validators profiting from sandwich trades:
Solana Validators Profit as Users Lose $30M in Sandwich Trades
Read more about Solana’s latest, secret patch that avoided a disaster:
Solana Quietly Patches Critical Vulnerability, Avoiding Network-Wide Outage
