Solana Has Tightened Its Validator Strategy to Boost Network Efficiency and Decentralization

Solana Foundation has tightened its validator strategy to boost network decentralization and reduce dependency on its support. As of April 2025, the Foundation implemented a policy where, for every new validator added to its Delegation Program (SFDP), three existing validators are removed if they meet specific criteria: they’ve been in the program for over 18 months and have less than 1,000 SOL in external stake. This move aims to encourage validators to attract independent stake and operate self-sufficiently, addressing concerns that many validators—up to 90-100% of their stake in some cases—rely heavily on Foundation backing.

Research from Helius indicates that over half of Solana’s validators could become unprofitable without this support, highlighting the challenge of high on-chain governance costs. The policy is part of a broader effort to improve the Nakamoto Coefficient, a measure of decentralization, by reducing stake concentration. However, the Foundation hasn’t formally responded to ongoing discussions about the policy’s impact.

By prioritizing validators with independent stake and phasing out those overly reliant on Foundation support, the policy aims to improve the Nakamoto Coefficient, reducing the risk of centralized control and enhancing network resilience. Validators with less than 1,000 SOL in external stake face removal after 18 months, which could render many unprofitable. With over half of validators potentially unviable without Foundation backing (per Helius data), smaller validators may struggle to attract independent stake, leading to consolidation or exits.

The “three-out, one-in” rule incentivizes validators to compete for external stake, fostering a more robust and self-sustaining validator ecosystem. However, it may disadvantage newer or smaller validators lacking resources to compete with established players. While the policy aims to reduce stake concentration, it could inadvertently favor larger validators who can secure external stake more easily, potentially creating new centralization risks if not carefully monitored.

Validators losing Foundation support may face financial strain, potentially reducing the number of active validators. This could affect network capacity or security if the validator pool shrinks significantly. The lack of formal Foundation response to community concerns may fuel debates about transparency and fairness, especially as on-chain governance costs remain high, burdening smaller validators. The policy pushes for a more decentralized and competitive network but risks short-term disruption for smaller validators and could reshape the validator landscape if independent stake doesn’t grow to fill the gap.

Cardano introduced on-chain governance with the Chang hard fork in September 2024, establishing a model with separate governance branches, a legislative body, and a constitutional committee. ADA holders can delegate voting power to Delegate Representatives (DReps), who influence network decisions, including validator (stake pool) policies. Cardano’s stake pools are community-operated, with rewards tied to delegation from ADA holders. The governance model encourages decentralization by allowing token holders to choose stake pools, reducing reliance on centralized entities.

Unlike Solana’s Foundation-driven staking, Cardano’s approach empowers the community to incentivize validators through delegation, fostering a competitive validator ecosystem. This democratic model enhances decentralization but risks low voter turnout, potentially concentrating influence among active DReps or large ADA holders. Compared to Solana, Cardano’s governance is less centralized, as it lacks a foundation dictating validator inclusion, but it faces challenges in ensuring broad participation.

Polkadot’s OpenGov model, implemented in 2023, uses on-chain governance where proposals are written in code, voted on transparently, and executed automatically upon approval. Token holders vote on network upgrades and validator policies, increasing trust through deterministic processes. Validators in Polkadot are selected based on stake and performance, with nominators (token holders) choosing validators to back. The system incentivizes validators to attract independent stake, similar to Solana’s push for self-sufficiency. However, Polkadot’s governance is fully on-chain, contrasting with Solana’s off-chain Foundation-led decisions.

Polkadot’s transparent, community-driven model reduces centralized control compared to Solana’s Foundation policy. However, it requires active community participation, and “whale” token holders could dominate voting, mirroring Solana’s concern about stake concentration. Polkadot’s approach offers a more decentralized alternative but demands robust engagement to avoid governance capture.

Ethereum relies on off-chain governance through Ethereum Improvement Proposals (EIPs), discussed in forums, conferences, and GitHub. Core developers, node operators, and miners (pre-Merge) or validators (post-Merge) reach consensus informally, with no formal on-chain voting. Since transitioning to Proof-of-Stake in 2022, Ethereum’s validators stake 32 ETH to participate, with rewards tied to performance. Unlike Solana’s Foundation staking, Ethereum has no central entity allocating stake; validators compete for community-driven delegation.

The ecosystem encourages decentralization through protocols like Lido, though concerns persist about Lido’s dominance (controlling ~30% of staked ETH). Ethereum’s decentralized validator model avoids Solana’s centralized Foundation control but faces risks of stake concentration in large staking pools. Its off-chain governance allows flexibility but can be slow and contentious, as seen in past debates like the block size issue, contrasting with Solana’s faster but less transparent policy changes.

Tezos employs on-chain governance where token holders vote on protocol upgrades via “bakers” (validators). Proposals are submitted, tested, and implemented automatically if approved, minimizing forks. Bakers stake XTZ and compete for delegation from token holders, similar to Solana’s validator incentives. Tezos’ governance allows bakers to vote on policies affecting validator rewards and requirements, creating a self-regulating system without a central foundation dictating staking choices.

Tezos’ on-chain model is more decentralized than Solana’s, as validators and token holders directly shape policies. However, low voter turnout and influence from large bakers can skew decisions, akin to Solana’s stake concentration risks. Tezos avoids Solana’s reliance on a single entity but must address participation to maintain fairness.

Cosmos operates a hub-and-zone model where each zone (blockchain) has its own governance, often on-chain, while the Cosmos Hub uses token-based voting for network-wide decisions. Validators and delegators vote on proposals affecting the Hub or individual zones. Validators in the Cosmos Hub stake ATOM and compete for delegation, with the top 180 validators forming the active set. Governance proposals can adjust validator requirements or rewards, driven by community votes rather than a central entity like Solana’s Foundation.

Cosmos’ decentralized governance empowers validators and token holders, contrasting with Solana’s Foundation-led approach. However, varying governance models across zones can create complexity, and validator profitability depends on attracting delegation, similar to Solana’s push for independent stake. Solana’s Foundation-driven validator policy is more centralized than Cardano, Polkadot, Tezos, or Cosmos, where community voting (on-chain) or consensus (off-chain, as in Ethereum) governs validator policies. This centralization allows Solana to enforce decentralization goals swiftly but risks alienating smaller validators and lacks the transparency of on-chain systems.

All ecosystems incentivize validators to attract independent stake, but Solana’s explicit removal of validators with low external stake (<1,000 SOL) is unique. Other blockchains rely on market-driven delegation, which can lead to stake concentration (e.g., Lido in Ethereum) but avoids top-down exclusion. Low voter turnout is a common challenge in on-chain governance (Cardano, Polkadot, Tezos), potentially centralizing power among large token holders, similar to Solana’s concern about stake concentration. Ethereum’s off-chain model mitigates this but sacrifices speed and transparency.

Solana’s off-chain policy changes are faster than Ethereum’s consensus-driven process or the voting cycles in Cardano and Polkadot. However, on-chain systems like Tezos and Cosmos can execute approved changes automatically, balancing speed with decentralization. Solana’s approach highlights the tension between enforcing decentralization (via policy) and maintaining it through community governance. Other blockchains show that on-chain voting fosters inclusivity but risks low participation or whale dominance, while off-chain models (Ethereum) offer flexibility but can be slow and opaque.

High governance costs, as seen in Solana (Helius research), are a universal challenge. Cardano and Cosmos address this through community delegation, while Ethereum’s high entry barrier (32 ETH) limits validator diversity. Solutions like Polkadot’s OpenGov or Tezos’ baker voting could inspire Solana to integrate more on-chain mechanisms. Compared to Solana’s Foundation-led validator policy, other blockchains like Cardano, Polkadot, Tezos, and Cosmos lean heavily on on-chain governance, empowering token holders and validators to shape network policies.

Ethereum’s off-chain model offers flexibility but lacks the determinism of on-chain systems. Each approach has trade-offs: Solana’s centralized control ensures rapid implementation but risks validator exclusion, while decentralized models enhance inclusivity but face participation and concentration issues. For Solana to align with broader trends, it could explore hybrid governance, integrating on-chain voting to complement its Foundation’s role, balancing efficiency with community input.