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SIMD-0096 Passed: Solana Validators to Receive 100% Priority Fees

May 28, 2024

Solana validators have voted in favor of SIMD-0096, a proposal to allocate full priority fees to validators. Until now, only half the validator fees used to get rewarded, while the remaining used to be burned.

This was not essentially aligned with validator incentives and encouraged “side deals.” To pull the plug on such behavior, the proposal was set in motion and voted upon. The Solana developer forum’s post noted,

“This ensures that validators are appropriately incentivized to prioritize network security and efficiency, rather than being incentivized to engage in potentially detrimental side deals.”

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Over 77.7% of the validators - including Solend, Jito, Helius, Bonk, Stakehaus, and Everstake - advocated the proposal. Triton, Step Finance, and Solana Compass were among the remaining ones who objected.

Explaining how this proposal shoots two birds with one stone and helps stakers alongside validators, Helius Labs’ CEO Mert Mumtaz explained:

“It’s more transparent, visible, and allows stakers to hold validators accountable since their stake plays a material role in these rewards.

"With side deals, they could be doing this and stakers would have no idea. Also means validators have more revenue they make which might incentivize them to lower commission without losing income.”

Source: Solana Developer Forum

Priority fees are additional charges that users bear in return for an inclusion guarantee. It essentially places their transactions ahead of others in the queue, and ain’t mandatory per se.

With validators set to pocket the entire priority fee going forward, it should be noted that the 50% base fee burn mechanism will still be in play. SIMD-0096 will not go live on the mainnet right off the bat. Implementation is expected to take a few months.

The approval failed to renew SOL’s up-streak. Despite noting a 4% incline a day back, the crypto market’s fifth largest asset was seen exchanging hands in red on the shorter time frame charts. It was priced around $166 at press time.

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