solana
  • Solana Foundation expelled crypto validator operators involved in ‘sandwich’ attacks, which manipulate transaction sequencing to exploit price differences, protecting investors from unfair trading practices.
  • The Foundation also reformed its incentive structure, redirecting transaction priority fees to validators to enhance network security and transparency, despite concerns about potential inflationary impacts.

The Solana Foundation has taken decisive action against crypto validator operators involved in “sandwich” attacks, a deceptive practice exploiting the transaction sequencing on networks like Ethereum and Solana. These attacks manipulate asset prices to profit from the price difference, causing retail investors to suffer the worst possible price outcomes. In response, the Foundation has expelled culprits from its delegation program, aiming to safeguard the integrity of the Solana ecosystem and protect individual investors.

Sandwich attacks involve placing an order just before a pending transaction and another immediately after, taking advantage of the price change to the detriment of other traders. This exploitative maneuver has seen increased prevalence on decentralized networks, prompting the Solana Foundation’s stringent response.

Tim Garcia, Solana’s validator relations head, announced the expulsion of these operators on Discord, reinforcing the Foundation’s zero-tolerance stance against malicious activities. He stated, “Decisions in this regard are final. Enforcement actions continue as we detect operators participating in mempools that enable sandwich attacks.”

Validators found participating in these harmful practices have had their participation in the program suspended indefinitely, without any possibility of appeal. The Foundation emphasized that some validators had even modified their configurations to facilitate these attacks, undermining the system’s integrity.

Mert Mumtaz, co-founder of Helius, a Solana RPC provider, warned about the severe consequences of such actions, describing how some operators had perverted the system for personal gain at the expense of retail users. He pointed out that these attackers had added modifications to their validators to enable sandwiching on Solana, drawing attention to the unintended support from the Foundation.

In response to these incidents, Solana has implemented a new policy where 100% of transaction priority fees are given to crypto validators. This change, voted at 77%, aims to incentivize validators to prioritize network security and functionality, despite concerns about potential inflation.

A report from Stakewiz.com, a group of validators, explained that while this measure might cause a slight increase in inflation, it is crucial for improving transparency and preventing exploitation. The debate surrounding this proposal was intense, reflecting fears of potential “side deals” between validators, particularly following incidents like the 2Fast bot’s exploitation of maximum extractable value (MEV) to profit $1.8 million.

Despite these challenges, optimistic voices like crypto investor Brian Kelly suggest that Solana could be the next crypto asset to have a spot ETF in the United States, although concerns remain about regulatory clarity.

In summary, the Solana Foundation’s firm actions against malicious validators underscore its commitment to maintaining a secure and fair environment for all users. By eliminating bad actors and reforming financial incentives, Solana aims to protect its ecosystem from exploitation and ensure the safety of individual investors.

Upholding Integrity and Security

Solana’s recent measures against “sandwich” attacks demonstrate its commitment to integrity and security within its crypto ecosystem. These actions not only protect the network from exploitation but also safeguard the interests of individual investors who rely on fair and transparent trading environments. As Solana continues to evolve, its proactive stance against fraud and exploitation sets a precedent for maintaining trust and confidence in decentralized networks.