Penalties Faced by Solana Validators for Alleged Economic Attacks
A group of Solana (SOL) validators is currently facing significant penalties for allegedly being involved in economic attacks against cryptocurrency traders. Reports reveal that over the past weekend, more than 30 validator operators were expelled from the Solana Foundation Delegation Program based on information from a knowledgeable source. Despite their continued status as validators on the network, these operators have been excluded from receiving payout enhancements resulting from validating transactions on the Solana blockchain. The majority of these operators are said to be of Russian origin.
The recent crackdown represents an escalation in the ongoing conflict between key players in the Solana validator community and an underground network of validators accused of taking advantage of traders through sandwich attacks. These attacks involve bots that preempt and post-fill trades that have not yet been executed, exploiting the actions of traders.
Sandwich attacks are categorized as a form of maximal extractable value (MEV) strategy, particularly prevalent on blockchains utilizing mempools—a mechanism where unconfirmed transactions are held. Although Solana does not natively incorporate a mempool, the extensively used validator software originally developed by Jito Labs had included this function.
In response to a surge in meme coin trading on Solana in March, Jito Labs deactivated the mempool feature due to the prevalence of sandwich attacks. The CEO of Jito Labs emphasized that this decision was made to safeguard the Solana ecosystem, despite the elimination of a revenue stream for validators, the operators sustaining the decentralized network.
Nonetheless, this action did not completely resolve the issue but rather shifted it underground. Reports emerged of private mempools whose operators were reaping substantial profits by enabling sandwich attacks. Infrastructure operator DeezNode put forward a proposition offering validators participating in its private mempool 50% of the profits generated through MEV, as outlined in documents.
A governance update released by the Jito Foundation late on Sunday revealed that 10% of the JitoSOL pool is allocated to validators managing private mempools. Additionally, the Jito Foundation has advocated for further economic ramifications on these validators by restricting the amount of staked SOL.
The Solana Foundation's internal delegation blacklist is relatively limited within the broader delegation program. It specifically targets 32 operators collectively holding 1.5 million SOL, accounting for approximately 0.5% of the stake in the program, an undisclosed source mentioned.
"Enforcement efforts are ongoing as we identify operators engaged in mempools facilitating sandwich attacks," a representative from the Solana Foundation declared on Sunday.
