As the Solana Foundation Delegation Program (SFDP) tightens its eligibility criteria, community validators who have served for years are facing a phased exit.
SFDP is a program designed to support small validators. As the program has continued to shrink over the past few quarters, independent operators believe that the next adjustment could be the final straw for them.
Representatives from the Solana Foundation have responded to validators' concerns, requesting feedback from operators and implying that "small validators with significant impact on the ecosystem will continue to thrive."
What changes have been made to SFDP?
Since the launch of the Solana mainnet in 2020, SFDP has helped small validators get off to a smooth start. Through operational support and matched staking, SFDP contributed to increasing the number of Solana validators to as many as 2,500 nodes in 2023.
As Solana has grown and scaled, SFDP has been steadily declining. To curb sybil farms and other predatory tactics used by a small number of bad actors, eligibility criteria have become stricter; the latest round of changes has crossed a critical threshold, potentially causing many of Solana’s longest-standing operators to lose their businesses entirely.
On-chain data shows that approximately 327 validators, or about 47% of the network, are currently receiving SFDP subsidies. As the number of validators supported by SFDP is capped at a hard limit of 100, more than 200 operators may lose the support needed to continue operating.
For many Solana independent validators, these changes may be the final straw.
The Independent Validators Alliance Layer 33, which aims to represent 33% of the network's staked share, has issued an open letter outlining its concerns regarding the proposed changes. Layer 33 believes that the Solana Foundation, through these adjustments, is disregarding the critical work of independent operators, whose efforts have been a vital part of Solana's growth.
Although institutional validators have undoubtedly enhanced Solana’s credibility, independent operators argue that major participants in Solana’s staking landscape have not actively contributed to the ecosystem. Among this network’s superminority, none of the validators participated in the Alpenglow community cluster—a test environment used to trial Solana’s largest consensus upgrade to date.
Layer 33 believes that Solana needs a large, sufficiently diverse, and widely distributed validator network. During the Teraswitch outage in August, the mainnet nearly halted, but Solana’s ASN (Autonomous System Number) diversity helped keep the network operational. Layer 33 reiterates that this diversity is partly due to previous SFDP requirements, which helped incentivize network resilience.
Other concerns mentioned by the organization include economic pressure on independent validators during the phased rollout of reduced slot times, which further increased operational costs prior to Alpenglow's launch.
In addition to citing other examples to emphasize the importance of independent validators, Layer 33 also makes the following requests regarding the upcoming SFDP adjustment:
- Pause the weekly validator exit batch schedule until network contributors complete their consultation and discuss alternatives.
- Continue providing an additional six months of support to validators participating in the Alpenglow community cluster.
- Use empirical data to demonstrate the rationale for a hard cap of 100 validators.
- Consult formally with SFDP members before finalizing the rules.
- Explore establishing a contributor model to help support independent validators that sustain network health.
While directly confronting the Solana Foundation on Layer 33, some operators have already acknowledged that the situation is beyond repair.
Tokomai has announced that the protocol's validators will officially enter a contraction phase after two years of operation, while founder ANSEL lamented that Solana is moving toward a validator system entirely composed of financial institutions.
As dissatisfaction with the proposed changes grows, Jacob Creech, Vice President of Technology at the Solana Foundation, stated that despite the controversy surrounding the new measures, they will ultimately propel Solana into "the next phase of delegation, focused on continuously improving network health and rewarding ecosystem contributors."
In response to Creech’s perspective, Tim Garcia, Head of Validator Relations at the Solana Foundation, said he looks forward to hearing more feedback from concerned validators.
SFDP currently accounts for 5.46% of the staked share.
Although this percentage may seem low at first glance, SFDP has currently delegated over $2.3 billion worth of $SOL among participants.