Solana Removes Validators for Cheating Retail Users

Solana Removes Validators for Cheating Retail Users

By Piotr Borowczyk

11 Jun 2024 (7 months ago)

3 min read

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Solana has expelled several validators from its delegation program for manipulating transactions to cheat retail traders in sandwich attacks.

Solana has expelled several validators from its delegation program due to their involvement in sandwich attacks on retail users. These actions are part of the foundation’s efforts to enforce strict measures against such malicious activities.

A sandwich attack is a type of Maximal Extractable Value (MEV) attack. In these attacks, bad actors manipulate transaction sequences to get better prices for themselves, hurting retail traders. They place transactions before and after a victim’s transaction, ensuring the victim gets the worst price while they profit. These attacks impact transaction security, efficiency, and fairness and can threaten network security by encouraging validators to engage in double-spending or transaction censorship.

The Solana Foundation has taken firm action against validators who modified their systems to enable sandwich attacks. Several operators have been removed from the network’s delegation program for violating best practices. Tim Garcia, Solana’s validator relations lead, stated that enforcement actions will continue against those involved in such activities.

Decisions in this matter are final. Enforcement actions are ongoing as we detect operators participating in mempools which allow sandwich attacks,” Garcia emphasized.

The validators removed from the delegation program will no longer receive support from the Solana Foundation. This program usually helps validators by delegating SOL tokens to them, allowing them to operate without holding many tokens themselves. Support is based on performance merits, ensuring only reliable validators are rewarded.

Mert Mumtaz, co-founder of Solana RPC provider Helius, explained that while expelled validators can still operate on the network, they won’t receive the usual benefits.

Most importantly, these operators can still do whatever they want; it’s a permissionless network—it just won’t be Foundation subsidized,” Mumtaz noted. The decision has sparked discussions about Solana’s centralization. Some community members argue that the Solana blockchain is more centralized than it appears, especially when the Foundation takes actions to protect the network.

Solana’s real scaling issue is trying not to expose how centralized it is while trying to protect the network from malicious attacks,” commented Mike Three on X.

These concerns about centralization are recurring and often resurface when the network faces significant issues or downtime. Despite the debates, the Foundation’s actions show its commitment to maintaining fairness and security.

Interestingly, Solana validators’ earnings from MEV have surpassed those of Ethereum. Since mid-March, MEV revenue on Solana has grown rapidly, reaching record highs. This revenue increase highlights the challenge of balancing validator incentives with protecting retail users.

Solana’s decision to expel validators involved in sandwich attacks marks a significant step in enforcing ethical practices. By removing support for malicious actors, the Foundation aims to maintain a fair and secure environment for all users. However, these actions also bring up ongoing concerns about the network's centralization. As Solana evolves, addressing these challenges will be crucial to maintaining trust and fostering a robust, decentralized ecosystem.

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