Independent Validators Are Reliant On Foundation Delegations

Independent Validators Are Reliant On Foundation Delegations

Recently, there has been an active discussion on validators’ reliance on foundation delegations, particularly in the context of Solana. 

Critics have been pointing out the fact that the Solana Foundation supports validators to help them offset the costs of running validator nodes, however the foundation can also remove their support at their own discretion. 

At Chainflow, we are a self-funded, independent operator that's been validating across chains since the earliest Cosmos testnets in 2017. We have been operating a validator on Solana since the earliest pre-mainnet days and currently receive Foundation delegation.

For what is worth, we also operate a RPL ETH validator, more as an experiment and point of comparison than anything else. Despite getting our start in ETH prior to starting Chainflow, we decided to not get into the ETH staking business. The reason for this is that we felt and still feel it's largely a commoditized business; one that requires an operator to run many validators, which then contributes to centralization.

With that out of the way, I'll move on to my point: that independent validator operators across networks are becoming more and more reliant on foundation delegations. For a recent example, take a look at how the Celestia Foundation Delegation Program has shaped and continues to shape its active set since genesis.

In networks where the validator set is capped, such as Celestia and unlike Solana, there is a significant barrier to entry, namely the amount of stake required to operate in the active set. 

And Ethereum, while not operating with a limited validator set, isn't very different when it comes to its 32 ETH capital requirement. However, yes, RPL (whose economics need an overhaul) makes it easier to enter with lower amounts of ETH. Yet the returns are lower as well.

Returning to the Celestia example, it is likely that at least half of the active set of validators rely on foundation delegation to stay in the said active set.

And in fairness to it, Celestia is far from the only example. It's simply the most recent example that comes to mind.

The point we are trying to make is that the Solana Foundation Delegation Program is far from the only program of its kind. It is, however, one of the more, if not the most, transparent of the programs out there. 

The requirements are published for all to see and there's even a dashboard that shows an operator why they are or aren't receiving delegation, as well as how much they may be receiving.

Similar programs on other networks publish qualifications to varying degrees of thoroughness and enforce them inconsistently. The selection process typically takes place behind closed doors and validators have very little visibility into why or why not they may be selected.

In conclusion, these criticisms of the Solana Foundation Delegation Program are made through a very narrow lens. And to the Solana Foundation's credit, they continue to operate transparently and in the open, despite the criticisms.