Solana validators approve 100% allocation of priority fees, ending 50/50 burn split Technology 2 weeks ago

Solana validators voted to allocate 100% of priority fees to themselves on May 27, ending the previous 50/50 split between burning fees and rewarding validators.The proposal, known as SIMD-0096, passed with 77% approval. It aims to address perceived flaws in the current system and align incentives for network security and efficiency.The change in priority fee allocation seeks to reduce the potential for side deals between transaction submitters and block producers, which proponents argue could undermine network security.Validators such as Everstake, Jito, Helius, Stakehaus, Leapfrog, Bonk, Solend, and Pico.sol supported the change.Meanwhile, validators, including Step Finance, Triton, GREED, Solana Compass, Shinobu, Orangefin, AG, Pumpkin Pull, and Edgevana, opposed the proposal.Critics, like Hanko Baggins from Bandito Stake, raised concerns about removing the burn mechanism, which helps manage Solana’s annual inflation rate.Baggins suggested that while increased fees might benefit validators in the short term, the removal of the burn could impact the network’s long-term health and suppress SOL’s price.Solana co-founder Anatoly Yakovenko addressed these concerns, stating that the current system requires users to pay double the priority fee to outbid tips, which go entirely to validators and are not burned. He described the priority fee burn as a bug in the system.Laine from Stakewiz estimated that the change could lead to a 4.6% increase in Solana’s issuance, aligning it with levels from a year ago. He emphasized that SIMD-0096 is part of a broader plan to improve block reward distribution, with other proposals like SIMD-0123 also in development.Although the vote has concluded, the activation of SIMD-0096 may take several months, as the current Solana Mainnet or upcoming upgrade does not support it.The delay allows for further discussion and development of additional proposals, such as SIMD-0123, which aims to streamline block reward distribution, and SIMD-0109, which proposes a native tipping mechanism.The decision to allocate 100% of the priority fees to validators highlights the varied perspectives within the Solana ecosystem and sets the stage for ongoing discussions about the network’s future.The move comes amid growing interest in Solana, following its meteoric climb to a local high of $210 earlier in March. The network has also recorded the highest trading volume in recent weeks.AJ, a passionate journalist since Yemen’s 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.CryptoSlate is a comprehensive and contextualized source for crypto news, insights, and data. Focusing on Bitcoin, macro, DeFi and AI. Stay ahead in the crypto game: Follow us on X for daily updates and analysis.Rob Marrocco believes crypto ETFs beyond Bitcoin and Ethereum are unlikely without first establishing a futures market or changing regulation.Solana’s established dominance tested by Base’s impressive user and transaction surge.Solana’s validators MEV earnings have outsripped that of the Ethereum blockchain.Launched just over a week ago on the Solana blockchain, the MOTHER token has already reached a market capitalization of $186 million.CryptoSlate’s latest market report dives deep into the effects corporate Bitcoin purchases have on the market.Disclaimer: Our writers’ opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.