Solana saw a frenzied trade activity in the past year. And the most likely beneficiaries were the validators of the network.
According to 21co, since November validator revenues consistently reached at least 40 million dollars every approximately two days. In comparison, they were only $4 million every 2 days around this time last. There are a number of validators that have sprung up in the last few years.
This week the small crypto-research startup Kairos Research, in partnership with Firstset node operator, launched a Solana validater. It currently holds around $3,000,000 in SOL delegated. Solana Validator Hardware Requirements “an order of magnitude higher” Firstset said that servers were more expensive on Ethereum than other blockchains.
Kairos had to also consider the increased costs of hardware providers based on Solana’s greater throughput, and that validators spend a little more time voting for blocks than the SOL each day. This is the way the network achieves consensus.
Solana Foundation covers the initial voting costs of new validators and stakes their large stock of SOL on smaller validators. Kairos’ and Firstset’s validator costs approximately $1,400 each month, and it is already profitable, thanks to the Solana Foundation, which helps with voting costs.
Validators can earn money from the SOL block rewards that are paid out by the network, and also MEV fees or priority charges charged by customers trying to close a transaction. Validators receive half the priority fee and set their own commissions on MEV and block rewards. The more SOL that is staked, the better your chances are of getting block rewards. Therefore validator income increases as you increase in size.
Helius, with its more than 3% share of stake on the Solana platform, had no intention to enter the staking market. When stake-weighted quality of service — a newer feature that prioritizes network traffic based on stake and makes it easier for RPC nodes with validators to land transactions — went live on Solana, Helius changed course.
“I was like, ‘Shit, we need a Solana validator now,'” Mumtaz said on an episode of the Lightspeed podcast. Helius’ hardware costs were minimal, as the company was already running a large number of nodes. It quickly attracted stakes after its launch in May 2024, thanks to Mumtaz’ brand and high APY.
Acquisitions are an option for larger companies. Sol Strategies is a holding firm focused on Solana that has acquired two validator businesses. The validator operation now generates between 100 and 200 SOL in most epochs. An epoch is a Solana measurement that takes about two days. It’s worth tens or thousands in revenue every second day.
Max Kaplan is the head staker at Sol Strategies. Max Kaplan used to be the head engineer of Kraken.
“It’s very competitive now,” Kaplan said about the marking space. “You need to be good at system level optimizations [and/or business development] to really make it profitable.”
Kaplan is still optimistic that it’s possible to make a profit with new validators. The fortunes of validators will be partly determined by whether Solana is able to maintain the unprecedented usage levels over the last few months.
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