Solana’s 85% Vote Transactions and High Validator Costs Raise Decentralization Concerns

• Solana’s vote transactions constitute 85% of network activity, prompting concerns about validator costs and decentralization.
• Failed transactions have led to significant fees for users, benefiting larger validators under the current voting system.
• An analysis highlights that new validators must submit high volumes of votes, drawing parallels to a Ponzi-like scheme.

Discover the intricate dynamics of Solana’s transaction system, exploring the validator costs, decentralization challenges, and high transaction failure rates affecting the network.

The Complexity of Solana’s Vote Transactions

Recent data indicates that Solana [SOL] relies heavily on vote transactions, which make up an overwhelming 85% of its total activity. This raises questions about the fairness and efficiency of Solana’s network, especially concerning validator costs and the actual user engagement on the platform.

The Impact on Validators

According to a detailed analysis by Dave, a well-known Cardano developer, Solana processed around 2.4 million vote transactions in a specific period. This leaves only 438,000 as non-vote transactions, suggesting that a large part of the network’s activity is system-generated. He argues that while these vote transactions are vital for the blockchain’s functionality, they disproportionately benefit larger validators due to the fees generated.

A Critical Look at Network Centralization

Dave draws attention to the network’s centralization issue, pointing out that only 17 validators control 33% of Solana’s staked assets. This centralization could compromise the network’s decentralization, a core principle of blockchain technology. The scenario creates a significant barrier for new or smaller validators due to the high operational costs—they need to submit about 216,000 votes daily, costing around 32.4 SOL per month.

The “Rich Get Richer” Phenomenon

This voting system fosters a “rich get richer” dynamic, making it challenging for smaller validators to compete. Larger validators continuously receive the majority of transaction fees, thereby consolidating their dominance within the network.

High Transaction Failure Rates

Another pressing issue is Solana’s high transaction failure rate. For example, the Jupiter Aggregator faced an 83% failure rate within 24 hours, where out of 10.31 million transactions, 8.56 million failed. Users paid a total of $6,334.4 in fees for these failed transactions, raising concerns about the network’s reliability. The community is calling for a thorough examination to determine the role of bots and validators in these failures.

Scrutinizing Solana’s Transaction Volume

In response to the revelations, some experts, such as DBCrypto, claim that Solana’s high transaction volume is partly due to system-related operations like oracle calls and compute budgets. When these are excluded, Solana’s actual transaction throughput could be as low as 20 to 40 TPS, much lower than commonly reported.

Conclusion

The recent examination of Solana’s vote transactions and high transaction failure rates reveals multiple challenges within the network. These include high costs for validators, which exacerbate centralization issues, and unreliable transaction throughput. Addressing these concerns is crucial for Solana’s future stability, reliability, and decentralization.