The number of Solana validators has dropped dramatically over the past three years, raising concerns about the decentralization of the blockchain network as the economics of running a node crowd out smaller operators.
On Wednesday, the number of Solana validators dropped 68% to 795, from a peak of 2,560 validator nodes in March 2023, According to to Solanacompass data.
Validators are responsible for adding modern blocks and verifying transactions in proposed blocks, playing a key role in the operation of the decentralized ledger.
While some of the decline reflects the removal of inactive or “zombie” nodes, industry participants say rising operating costs and fee competition are forcing smaller validators to go offline.
Independent validator operator Solana who posts under the name Moo he said on X that many tiny validators are considering closing down because the economics no longer make sense.
“Many tiny validators are actively considering closing down the company (including us). Not because of a lack of faith in Solana, but because the economics no longer work.
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Moo said immense validators charging 0% fees force smaller validators to take profits, making it economically unviable to continue running the node.
“We started validation to support decentralization. But without economic feasibility, decentralization becomes charity,” Moo said.
The trend signals that retail validators can no longer contribute sustainably to securing the network. It also shows that Solana nodes will increasingly be operated by immense operators, pushing out smaller players and raising potential concerns about the degree of decentralization of the network.
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Nakamoto Solana’s ratio sees a decline of 35%.
As the number of validators decreased, Solana’s Nakamoto Ratio also dropped by 35% over the same period, to 20 on Wednesday, March 31, 2023, according to Solanacompass.
The Nakamoto coefficient measures the decentralization of a blockchain by specifying the minimum number of independent entities, such as validators or miners. The decline signals that Solana’s resources are becoming less distributed and the network is becoming less decentralized.
The reason for this decline may be the rising costs of running a profitable validator node, which have increased significantly over the last three years with the Solana token (SOL).
Excluding hardware and server costs, validators must make an initial investment of at least $49,000 in SOL tokens in their first year of operation, requiring at least 401 SOL per year for voting fees to remain operational.
This is because validators must participate in the consensus protocol, requiring them to submit a voting transaction for each block the validator agrees to, which can cost up to 1.1 SOL per day, According to to the technical documentation of the Solana Agave validator.
Cointelegraph reached out to the Solana Foundation for comment but did not receive a response via publication.
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