The Solana community has concluded a governance vote favoring a proposal to allocate 100% of priority fees to validators. This decision marks the end of the previous system, which burned 50% of these fees and was thought to create an imbalance between validator incentives and network security.
Vote Outcome and Community Reactions
Around 77% of validators, including Everstake, Bonk, and Solend, voted in favor of the Solana Improvement Document (SIMD)-0096. Opponents included Step Finance, Solana Compass, and Triton. The new system aims to dissuade validators from making side deals with block producers, thereby enhancing overall network security and efficiency.
Concerns Over Inflation
Some community members are concerned that removing the burn mechanism could increase SOL’s inflation rate, negatively impacting the network. “While our bags would significantly benefit from the increased fees, I am not comfortable with removing the burn mechanism,” wrote Hanko Baggins from Bandito Stake.
Proponents argue that the changes will have minimal impact on inflation. Stakewiz’s Laine stated, “The burn argument doesn’t make sense, as burning [priority] fees is just a bonus. If [priority] fees are not burned or [priority] fees don’t exist at all, it makes no difference to emission.” According to Laine’s estimates, the net change to inflation would be a 4.6% increase in SOL issuance, essentially the same as before priority fees were introduced a year ago.
Addressing Concerns and Criticisms
Solana Labs co-founder Anatoly Yakovenko addressed concerns on X, explaining that under the current system, users end up paying double the priority fee to outbid tips that go to validators. One major criticism of the proposal was that only validators were allowed to vote on the outcome, with only 21 validators required for a majority vote.
“Many non-validating users believe now that this proposal is validator collusion in itself and will be a gateway to more negative impacts for users,” said a user named freedomfighter on the governance forum.
Implementation Timeline
Despite the voting outcome, the proposal may not be activated for months. The feature required to implement this change is not yet supported in the current mainnet beta and upcoming mainnet beta software.
The Solana community’s decision to allocate 100% priority fees to validators marks a significant shift in the network’s fee structure. While the move aims to enhance network security and efficiency, concerns over inflation and governance processes remain.
