Solana is undergoing a pivotal shift in its validator ecosystem as the Solana Foundation rolls out a bold new policy aimed at accelerating decentralization. The move, while framed as a step toward greater network independence, could force hundreds of smaller validators to exit the network—raising urgent questions about accessibility, equity, and the long-term vision for Solana’s governance.
At the heart of this transformation is the Solana Foundation Delegation Program (SFDP), a cornerstone initiative designed to support validator growth since the network’s early days. But now, with institutional interest surging—especially around potential SOL ETF approvals—the foundation is tightening eligibility rules in an effort to reduce reliance on centralized backing and encourage community-driven validator sustainability.
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The “One In, Three Out” Rule: Reshaping Validator Dynamics
The most controversial aspect of the new policy is its “one in, three out” mechanism. For every new validator added to the SFDP, three existing validators will be removed—provided they meet specific criteria.
To qualify for removal, a validator must:
- Have been part of the SFDP for at least 18 months
- Hold less than 1,000 SOL in external stake (i.e., stake not provided by the foundation)
This rule targets long-standing but underperforming nodes that haven’t successfully attracted organic community support. By phasing them out, the foundation aims to create space for more resilient, independently backed validators.
Importantly, the policy took effect immediately upon announcement on April 23, signaling the urgency behind Solana’s push for a leaner, more decentralized validator set.
How Many Validators Are at Risk?
The scale of potential impact is significant. As of April 24:
- 835 validators participate in the SFDP
- They represent 62% of all Solana validators
- The foundation has delegated approximately 40.5 million SOL through the program—about 10% of total staked SOL
Data from Helius (as of August 2024) reveals that roughly 51% of current validators hold less than 1,000 SOL in external stake. Applying this figure today suggests around 686 validators could be vulnerable under the new rules.
Without a meaningful influx of external stake, these validators may be unable to survive once foundation support is withdrawn.
Understanding SFDP: Support Mechanisms Behind Validator Growth
The Solana Foundation Delegation Program was created to lower barriers to entry and promote network security during Solana’s formative years. It offers three key forms of support:
1. Stake Matching
For every SOL staked by external delegators, the foundation matches it 1:1—up to a maximum of 100,000 SOL per validator. However, once a validator accumulates over 1 million SOL in external stake, it becomes ineligible for any further foundation delegation.
2. Residual Delegation
After all eligible validators receive their matched stake, leftover funds are distributed evenly among remaining participants. Currently, this provides about 30,000 SOL per validator, though the foundation expects this amount to decline as more resources shift toward community-run stake pools.
3. Voting Cost Assistance
Running a validator incurs daily transaction costs—approximately 1.1 SOL per day—used for voting on blocks. To ease this burden, SFDP offers temporary subsidies:
- First 45 epochs (~3 months): 100% coverage
- Next phases: Gradual reduction by 25% every 45 epochs
- Ends after 180 epochs (~1 year)
While helpful, these supports were always intended as onboarding aids—not permanent lifelines.
Is Solana Falling Into a Centralization Trap?
Herein lies the paradox: efforts to promote decentralization may inadvertently accelerate centralization. According to estimates from Laine in 2024, a validator needs at least 3,500 SOL just to cover voting costs—excluding hardware and operational expenses, which can exceed $45,000 annually.
For smaller operators, losing SFDP support likely means shutdown.
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Although the 18-month tenure requirement and the need for a new validator to trigger removal offer some breathing room, the broader trend points toward higher barriers to entry. And with major institutions stepping in—such as SOL Strategies, which secured up to $500 million in convertible financing to expand its staking operations—the playing field is tilting further toward well-capitalized players.
Similarly, DeFi Development Corporation recently increased its SOL holdings to 317,000 tokens, signaling strong institutional appetite for long-term participation.
Why Is Decentralization Suddenly So Urgent?
The timing of these reforms is no coincidence. With the U.S. SEC welcoming a new chair—Paul Atkins, known for his crypto-friendly stance—nearly 72 crypto-related ETFs are now under review. Among them, SOL ETFs are considered some of the most likely candidates for approval, with final decisions expected around October 2025.
However, regulators have consistently raised concerns about whether certain blockchains are sufficiently decentralized—or if their tokens should be classified as securities. Ethereum’s repeated delays serve as a cautionary tale.
Solana’s aggressive push to reduce foundation influence reflects a strategic effort to pre-empt regulatory scrutiny and position SOL as a truly decentralized asset.
Can Small Validators Survive?
Despite noble intentions, the current trajectory risks alienating the very community members who helped build Solana’s early infrastructure. Many small validators joined during periods of high network congestion and technical challenges, contributing stability when it was needed most.
Now, they face obsolescence—not due to poor performance, but due to lack of capital access.
While past proposals like SIMD-0228 were rejected for similar reasons, this latest policy change underscores a recurring theme: as institutional adoption grows, grassroots participation shrinks.
Frequently Asked Questions (FAQ)
Q: What is the main goal of Solana’s new validator policy?
A: To reduce dependency on foundation-backed stake and promote validators that can sustain themselves through community support and organic growth.
Q: How many validators might be affected by this change?
A: Approximately 686 validators—about half of all SFDP participants—could be at risk if they fail to attract more than 1,000 SOL in external stake.
Q: Does this policy improve decentralization?
A: It aims to, but critics argue it may have the opposite effect by favoring well-funded entities over independent operators, potentially increasing concentration among large stakers.
Q: Can small validators adapt and survive?
A: Yes, but only if they actively grow their community backing and secure external delegations. Tools like stake pools and outreach campaigns will become essential.
Q: Will this affect network security?
A: A sudden drop in active validators could temporarily reduce redundancy. However, if new, robust nodes replace outgoing ones, long-term security may improve.
Q: What happens after October 2025 regarding SOL ETFs?
A: That’s when key regulatory decisions are expected. If approved, SOL ETFs could bring massive inflows—but only if Solana convincingly demonstrates sufficient decentralization.
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Final Thoughts: Balancing Growth and Inclusivity
Solana stands at a crossroads. On one side: institutional validation, regulatory compliance, and scalable infrastructure. On the other: inclusivity, open access, and grassroots innovation.
True decentralization isn’t just about removing centralized control—it’s about ensuring diverse participation across economic tiers. As Solana evolves, the real test won’t be how many validators it has, but how fairly it distributes power among them.
For now, the message is clear: adapt or exit. Whether that leads to a healthier network—or a more centralized one—remains to be seen.
Core Keywords: Solana validator, decentralization, SFDP, SOL ETF, stake delegation, voting cost assistance, Solana Foundation