Solana continues to grow, as evidenced by the number of transactions processed, the quality of partners and technology firms looking to tap into their technology, and the explosion in meme coins.
Solana Powered By 18 “Super Minority” Validators Including Binance And Coinbase Wallets
Yet, amid this impressive growth, there is a ticking decentralization time bomb. Onchain data shows that only 18 “super minority” validators control over 33.3% of the network stake.
Solana supports SOL staking to be energy efficient, where an operator has to operate a node, connect it to the consensus layer, and allow it to process submitted transactions. Like in all public ledgers, those who get lucky and approve a block receive block rewards and the associated transaction fees.
The latest data shows that Solana supports 1,392 validators. However, only 18 are from the super minority, a huge decentralization concern.
As expected, some of these special validators include a Coinbase wallet with over 11.8 million SOL staked, Binance staking with over 7.2 million SOL, and Galaxy locking over 12.6 million SOL. Others include Helius, which boasts over 12.8 million staked SOL, and Figment, with more than 10.7 million locked in.
Comparing this small subset of validators to the total number of connected nodes means that only 1.2% of validators can take over the platform, reversing transactions, should they band.
While the possibility of this happening is low, it cannot be discounted, even if the Solana Foundation subsidizes its validators. Should it happen, this small set of super minority validators will join hands, initiating a majority attack. This dreaded attack permits them to roll back transactions and steal funds from users, a disaster for Solana.
A majority attack on the sector’s leading smart contracts platform would be a massive blow. However, even with this, it would still highlight the industry’s fragilities and the need for security decentralization.
When Will Solana Decentralize?
Compared to Solana, Ethereum is secured by over one million validators distributed worldwide. To operate an Ethereum node, operators must stake at least 32 ETH. However, those without the 32 ETH can still earn Ethereum rewards via platforms like Rocket Pool or Lido Finance.
Like Ethereum, Solana offers similar options. DeFiLlama data shows that Jito is the largest by total value locked (TVL), permitting SOL holders to help secure the network in return for a yield.
For now, it remains to be seen whether exchanges and other centralized platforms will race to become the super minority validators. Ideally, if more validators enter the network, this cohort will be thinned out, spread preferably across thousands of validators, improving decentralization.