The Solana Foundation has expelled a lot of validator operators from its influential delegation program. This motion is attributed to their involvement in executing “sandwich attacks” against unsuspecting network users, a type of predatory trading that undermines network integrity. The choice adds a recent layer to the escalating rivalry between Solana and Ethereum, highlighting broader concerns over network governance and the moral dimensions of validator operations.

Tim Garcia, the Validator Relations Lead, made the announcement via Discord, emphasizing the finality of the Foundation’s decision: “A bunch of operators within the Solana Foundation Delegation Program have been faraway from this system resulting from violations […] Decisions on this matter are final. Enforcement actions are ongoing as we detect operators participating in mempools which permit sandwich attacks.”

Mert Mumtaz, founder and CEO of Helius Labs, provided an in depth explanation of the problems at hand. He described a sandwich attack as a manipulative trading strategy where malicious actors exploit the ordering of transactions to drawback retail investors, ensuring they receive the worst possible prices.

“This just isn’t natively possible on Solana since the client doesn’t have a mempool,” Mumtaz explained. “Certain actors have added mods to their validators to enable sandwiching on Solana.” He stressed that the SOL Foundation’s primary goal is to guard retail users from these attacks, reinforcing that while the ousted operators can still function on the network, they’ll now not profit from Foundation subsidies.

Solana Vs. Ethereum Rivalry Heats Up

The incident has drawn sharp criticism from Ethereum community stalwarts, including Ryan Berckmans, an esteemed investor referred to as ryanb.eth. He critiqued SOL’s approach to solving issues related to MEV, questioning the network’s seriousness as a settlement layer.

“The Solana Foundation provides financial support to many validators because running a Sol validator costs $65k+/12 months. Now, the following step of their plan to resolve MEV was to drag financial support from validators who extract MEV. Solana just isn’t a serious settlement layer,” Berckmans asserted.

Countering Berckmans’ criticisms, Mumtaz highlighted the financial and operational disparities between Solana and Ethereum validators. “You haven’t done the work required to have an informed opinion,” Mumtaz retorted, mentioning that while Solana validators have lower setup costs in comparison with Ethereum’s 32 ETH minimum stake requirement.

“Perhaps you’re forgetting that with the 32 ETH minimum, it costs ~120kfor Eth, double Solana — *and* while SOL validator revenue has surpassed Eth multiple times previously month. this isn’t pulling “support from validators doing mev,” he stated and clarified that the SOL Foundation is “simply not giving out subsidies to malicious validators who sandwich, who rob retail after which keep all of the rewards with 0 network/in-protocol distribution—it’s purely extractive.”

Furthering the dialogue, Lucas Bruder, CEO of Jito Labs, defended the Foundation’s position, emphasizing the alignment of interests between the Foundation and the broader network. “The Solana foundation is a staker on the network. Stakers should need to see the network achieve success. Why would they support something that decreases the likelihood of the network being successful?” he posited.

Nonetheless, Bruder also acknowledged the predominant nature of memecoin trading and the potential risks of alienating this user base. “Most activity on Solana is memecoin trading, so for those who screw over the predominant user base of the blockspace, they’ll leave and we’ll all be sitting here with less usage wondering why tf we didn’t do anything,” he argued, stressing the necessity for long-term solutions to network challenges.

Ryan Berckmans doubled down on his critique, stating: “So if the Solana Foundation doesn’t use their centralized power to incentivize validators to stop extracting max MEV, then memecoin traders may get fed up and switch to a quick low-cost chain with less potential for MEV extraction, just like the Base Ethereum L2, after which Solana could be a ghost chain. I feel this story writes itself. The SOL/ETH ratio vastly overstates Solana’s durability as a serious competitor to either the Eth L1 or our greatest L2s.”

This ongoing debate underscores the heated rivalry between SOL and ETH in addition to the complexity of governance in decentralized networks, the technical challenges related to MEV, and the strategic decisions that may significantly impact the perceptions and functionality of blockchain ecosystems.

At press time, SOL traded at $158.03.

Featured image from CoinDCX, chart from TradingView.com