The Solana (SOL) community recently concluded a governance vote, resulting in a decision to allocate 100% of priority fees to validators.
The Solana (SOL) community recently concluded a governance vote, resulting in a decision to allocate 100% of priority fees to validators. This change marks a departure from the previous system in which 50% of fees were burned. The previous system had faced criticism due to reports of certain validators engaging in side deals with block producers to ensure faster transaction processing. The new approach aims to discourage such behavior, leading to improved network security and efficiency by directing the entire fee to validators.
The vote, known as Solana Improvement Document (SIMD)-0096, saw approximately 77% of validators supporting the proposal. Prominent validators such as Everstake, Bonk, and Solend were among those in favor, while Step Finance, Solana Compass, and Triton expressed their opposition.
However, some members of the community raised concerns about the removal of the burn mechanism and its potential impact on SOL tokenomics, particularly the inflationary supply in the long run. Proponents of the proposal argued that the changes would have minimal effect on inflation. Laine from Stakewiz countered the burn argument, asserting that the net change to inflation would result in a 4.6% increase in SOL issuance, which is essentially the same as before the introduction of priority fees a year ago.
Addressing concerns, Solana Labs co-founder Anatoly Yakovenko explained on X that the current system often requires users to pay double the priority fee to outbid tips that go to validators. However, one criticism of the proposal was the limited voting power granted solely to validators. With only 21 validators needed for a majority vote, many non-validating users viewed this as potential collusion and expressed concerns about negative impacts on users.
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