Solana upgrades software as validators see fortunes shift

Daily validator revenue has been in excess of $30 million every day since mid-October

article-image

Solana and Adobe stock modified by Blockworks

share


This is a segment from the Lightspeed newsletter. To read full editions, subscribe.


Two months ago, I reported on some of the woes facing Solana’s smaller validators, which are computer nodes that verify Solana’s ledger is accurate. Solana’s fees and tips were in decline amid apparent fatigue from memecoin traders. In response, the Solana Foundation — the non-profit charged with supporting Solana — set a cap on the commissions that validators could charge while receiving a staking delegation from the foundation, which is a necessity for some small validators. 

Most crucially, the price of SOL was languishing, limiting upside for validators’ biggest potential source of revenue. Some estimated that validators would need to attract millions of dollars more in SOL than before to break even. 

Today, that all appears to have shifted. SOL’s price crossed the $200 mark for just the third time since 2021, and daily validator revenue has been in excess of $30 million every day since mid-October, according to data from 21.co. In early September, revenue was around $22 million per day. 

Anza, which is the developer shop spun out of Solana Labs, just released v2.0.14 of Solana’s software, one of its first upgrades since it implemented a central scheduler over the summer. 

So far, only around 40% of validators have made the switch from v1 to v2. The upgrade makes minor tweaks to the Solana protocol, but validators who made the switch have anecdotally reported better performance. 

One validator said the new client version has better maximal extractible value (MEV) rewards than the old one. Another said their votes — or transactions made to validate the blockchain ledger is accurate — have been going through quicker since the upgrade. 

Knoxtrades, the anonymous owner of the Juicy Stake validator, told me that they have noticed Solana’s central scheduler “works in conjunction” with stake-weighted quality of service (SWQoS), a feature that lets larger validators land transactions more effectively. This has caused a “noticeable change in block rewards” because Solana blocks are packing in transactions more efficiently, knoxtrades said in a text.

But what could be most important to look for is how many validators plug their computers back in. A year ago, the Solana network had around 1,970 nodes, according to Solana Compass. Today, that figure is 1,358, indicating a less distributed set.

Still, some validators have chosen to get back in the game during Solana’s recent metrics and price rally: The network has added 58 new nodes since Sept. 28.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

dydx unlimited.png

Research

dYdX Unlimited is a revamp to the protocol's design and tokenomics.