4 months ago
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SIMD-0096’s implementation on Solana’s mainnet is expected to take several months. As per the proposal, a feature gate will be used to manage this transition.
Solana validators have voted in favor of the Solana Improvement Documents (SIMD)-0096 proposal to bolster network security and improve incentives for validators. The proposal, which garnered 77% support, will redirect all transaction priority fees to the validators for the blocks, a departure from the previous model where fees were split equally between burning and rewarding validators.
SIMD-0096 aims to better align validator incentives with network security by ensuring they receive full priority fees. This eliminates potential side deals between block producers and transaction submitters. As the original proposal stated:
“This ensures that validators are appropriately incentivized to prioritize network security and efficiency, rather than being incentivized to engage in potentially detrimental side deals.”
The proposal received overwhelming support, with 77% of validators voting in favor during an on-chain vote. Notably, the vote, which concluded at the end of epoch 620, recorded 51.17% stake participation.
Understanding Priority Fees
Priority fees in Solana are optional fees users can add to their transactions to increase the chances of their transactions being processed promptly. In other words, these fees help ensure that a user’s transaction is placed at the front of the execution ordering queue.
Previously, Solana’s model for handling these fees involved burning 50% of the priority fees and distributing the remaining 50% to validators. This discrepancy leads to validators prioritizing side deals over the network’s overall health and security, thus creating an imbalance.
SIMD-0096 proposes a significant shift by stopping the burning of priority fees altogether while maintaining the 50% burn of base (or normal) transaction fees. By adjusting the priority fee structure to reward validators with 100% of the collected fees, SIMD-0096 aims to rectify the misalignment of incentives.
Interestingly, the proposal also introduces a potential drawback. By directing the entire priority fee to the validators’ accounts, there is a risk that block leaders might artificially inflate the reported priority fees in their blocks. In the previous model, burning a portion of the priority fees served as a deterrent to such behavior.
Implementation Timeline
SIMD-0096’s implementation on Solana’s mainnet is expected to take several months. As per the proposal, a feature gate will be used to manage this transition. While transaction submitters will not experience any changes in their payment structures, the updated software will allocate a larger portion of fees to validators. The proposal explains:
“A feature gate is essential to ensure a smooth transition for all validators to the new functionality at the epoch boundary, thereby maintaining consensus.”
Current Market Performance
Meanwhile, Solana (SOL) has shown positive market performance. As of now, SOL is trading around $167, marking a 1% increase in the last 24 hours. Additionally, the trading volume has seen a rise of approximately 7.5% within the same period, standing robust at $2.9 billion.
