$SOL
VanEck research head warns Solana upgrades could slash validator earnings VanEck’s head of digital assets research, Matthew Sigel, has warned that upcoming Solana network upgrades could significantly impact validator earnings while raising centralization risks.Sigel outlined three major proposals — SIMD 096, SIMD 0123, and SIMD 0228 — in a post on X on Mar. 4. These proposals seek to improve Solana’s Solana
5.43%
Solana economic framework but have the potential to reduce validator revenue by up to 95%.
Solana has several upcoming protocol upgrades, known as SIMDs, aimed at enhancing its technical capabilities and economic framework. These changes could help stabilize and strengthen Solana's position in the crypto ecosystem moving forward.
Solana recently implemented SIMD 096…
— matthew sigel, recovering CFA (@matthew_sigel) March 4, 2025
Solana’s SIMD 096, implemented on Feb. 12, redirected 100% of priority fees to validators, eliminating the previous system that burned half of these fees. Staking payouts increased as a result, but off-chain trading agreements between validators and traders were deterred.
SimD 0123, which is currently up for vote, would further divert revenue away from node operators by requiring validators to pay priority fees to stakers.
SIMD 0228, the most contentious proposal scheduled for a vote on Mar. 6, would modify Solana’s inflation rate based on stake participation. The network’s yearly inflation rate would decrease from 4.7% to 0.93% if staking levels stayed at 63%. This would lower token dilution but also reduce staking rewards, much to the disadvantage of validators.#qasimmughal