Solana Upgrade Boosts Validator Performance and Revenue

Overview of Validators' Struggles

Two months ago, concerns were raised regarding the challenges faced by smaller validators in the Solana network. These validators, responsible for verifying the accuracy of Solana's ledger, were experiencing a decline in fees and tips, largely due to a decrease in activity from memecoin traders. To address this, the Solana Foundation implemented a cap on the commissions that validators could charge while receiving staking delegation, which is crucial for many smaller validators.

Recovery in SOL Price and Validator Revenue

Recently, the situation has markedly improved. The price of SOL has crossed the $200 threshold for only the third time since 2021. Additionally, daily revenue for validators has surpassed $30 million since mid-October, a significant increase from approximately $22 million in early September.

Software Upgrade: Version 2.0.14

Anza, the developer team that emerged from Solana Labs, has released version 2.0.14 of Solana's software. This upgrade follows the implementation of a central scheduler earlier in the summer. Currently, about 40% of validators have transitioned from version 1 to version 2. The upgrade includes minor adjustments to the Solana protocol, but those who have adopted it report improved performance.

Validator Feedback on the Upgrade

Validators who upgraded have shared positive feedback regarding the new client version. Some noted enhanced maximal extractable value (MEV) rewards, while others observed that their transaction validations have become more efficient. Knoxtrades, the anonymous operator of the Juicy Stake validator, mentioned that the central scheduler now works effectively with stake-weighted quality of service (SWQoS), leading to increased efficiency in transaction processing and a noticeable improvement in block rewards.

The Importance of Validator Participation

A critical factor to monitor is the number of validators re-engaging with the network. A year ago, Solana had approximately 1,970 nodes, but this number has decreased to 1,358, indicating a less distributed network. However, the recent uptick in Solana's metrics and price has encouraged some validators to return, with 58 new nodes added since September 28.