Solana validators face a turning point: the foundation aims for Decentralization, and half of the validators are facing survival challenges.

Author: Frank, PANews

As the SOL ETF is pushed onto the agenda by institutions, the Solana ecosystem seems to be accelerating the pace of reform in decentralized governance. On April 23, the Solana Foundation introduced a new policy for the Solana Foundation delegation plan (SFDP). For each new validator added, if certain validators have been qualified for at least 18 months to receive Solana Foundation delegation on the mainnet and have less than 1000 SOL staked outside of the Solana Foundation delegation, three of them will be removed. The intention behind these policies is to enhance validator independence by reducing their reliance on the foundation. However, it appears that the final outcome may still be the optimization of a large number of small and medium-sized nodes.

"One in, three out" optimization of validator structure

The most striking part of the new policy is its "one in, three out" replacement rule. Specifically, for every new validator added under the Solana Foundation Delegated Program (SFDP), three existing validators will be removed.

The criteria for triggering removal are very clear and consist of two key conditions. First, the validator must have been qualified for the foundation's delegation for at least 18 months; second, the validator must have external staking from outside the foundation's delegation of less than 1000 SOL. These two conditions combined precisely point to those validators who have long participated in the delegation program but have failed to prove their independent viability by attracting community support.

It is worth noting that this policy takes effect immediately after its announcement, demonstrating that the Solana Foundation is urgently advancing the process of decentralizing the Solana network.

affects or involves half of the validators

According to official data, as of April 24, there are currently 835 validators receiving stakes from the Foundation through SFDP, accounting for 62% of the total number of validators on the Solana network. The total amount of SOL delegated through the program is approximately 40.5 million SOL, accounting for 10% of the total amount of SOL staked on the Solana network.

According to a report by Helius at the end of August 2024, approximately 51% of validators have a staking amount of less than 1000 SOL obtained from external sources. If this proportion does not change significantly, the current number of eligible validators is about 686. In the future, influenced by this policy, these validators may be forced to exit the validator ranks if they fail to attract more SOL staking. The reason for such a significant impact is mainly that many validators rely on the Solana Foundation's SFDP program for their survival.

As for why the support from the foundation is directly related to the survival of many validators. Let's revisit the SFDP program, the Solana Foundation's entrusted program (SFDP) is one of the core mechanisms supporting the development of the validator network in the Solana ecosystem. The initial intention of establishing this program was to guide growth in the early stages of the network, lower the entry barrier for validators, especially by providing basic delegation to help validators with less capital participate in consensus and earn rewards, thereby promoting the increase in the number of validators and the overall security of the network.

SFDP supports validators in various ways:

1. Stake Matching (: This is a key mechanism to incentivize validators to attract external staking. The foundation will match the external staking received by validators at a 1:1 ratio, with a maximum matching amount of 100,000 SOL. However, this matching is not unlimited. Once the validators' external staking exceeds 1,000,000 SOL, the foundation will no longer provide any delegation (including matching and residual delegation).

2. Remaining delegation )ResidualDelegation(: After all eligible staking matches are completed, the remaining SOL in the SFDP pool will be evenly distributed to all other eligible validators. According to Helius' analysis, this delegation is currently around 30,000 SOL per validator. However, the Foundation has said that this remaining delegation is expected to gradually decrease as it increases its investment in community-run staking pools.

3. Voting Cost Assistance ): Running a Solana validator requires ongoing voting transaction fees, which can be a significant expense for new or low-staked validators (approximately 1.1 SOL per day). To alleviate this initial burden, SFDP offers a time-limited voting cost subsidy program. For new mainnet validators applying for this support, the foundation covers 100% of the voting costs for the first 45 epochs (approximately 3 months) after they join the program, after which the coverage percentage decreases by 25% every 45 epochs until the subsidy stops after 180 epochs (approximately 1 year).

( Is Solana trapped in a paradox of becoming more centralized with each reform?

According to Laine's estimate in 2024, a validator needs at least 3,500 SOL in staked amounts to balance the voting costs, not including the server costs of over $45,000 a year. Therefore, it can be said that if the SFDP plan is enforced, a large number of small validators will have no choice but to shut down.

![Solana Validators Face Changes: Foundation Aims for Decentralization, Half of Validators Face Survival Test])https://img.gateio.im/social/moments-b810c7d9441e446501717aa8e31930d3###

However, there are two external conditions for this program, which are that you have been in the SFDP program for 18 months and that SFDP needs to add a new validator. This also counts as a buffer period for these ineligible validators.

From a design perspective, this plan aims to reduce validators' reliance on the Solana Foundation, enhance the independence of validators and community support, and lower the perception that the Solana Foundation exerts excessive influence over the ecosystem. However, from the potentially foreseeable outcomes, if there are not enough new validators of sufficient quality to fill the vacancies after the removed validators exit, or if the new validators themselves struggle to survive in a competitive environment, the total number of validators on the network may decrease, thereby harming decentralization.

On April 22, the new chairman of the US SEC, Paul Atkins, was sworn in, and the new chairman close to crypto will have 72 crypto-related ETFs pending approval after taking office. While quite a few of them may be difficult to pass, SOL at the top of the list as the most requested token may be one of the most promising tokens to be approved. In terms of timetable, the final approval date of SOL is basically concentrated in October 2025. However, the important issue Solana is facing is similar to the reason why Ethereum has been repeatedly postponed in the past, which is that it is not decentralized enough to be judged as a security. As such, this is probably one of the main reasons why the Solana network has to aggressively push for decentralization at the moment.

On the other hand, as more and more institutions in the market recognize it, the Solana network may see an increasing number of large validators joining in the future. On April 23, SOL Strategies, a company listed on the Canadian Securities Exchange, announced that it has secured a convertible note financing of up to $500 million, which will be specifically used to purchase SOL and stake it on the validator nodes operated by the company. On the same day, another U.S. listed company, DeFi Development Corporation, announced that it would increase its total position in SOL to 317,000 coins, planning to hold it long-term and participate in staking for returns.

Ultimately, whether it is the previously overturned SIMD-0228 proposal or the current "new policy" of the Solana Foundation, along with the increasing participation of institutions, the direct result seems to be the frustration of small and medium validators, with the threshold appearing to be getting higher. This outcome does not seem to contribute to advancing the degree of decentralization. For Solana, how to lower the threshold for validators may be the true attitude towards promoting decentralization.