Solana Foundation Takes Action Against Validators Involved in Sandwich Attacks

Solana Foundation Takes Action Against Validators Involved in Deceptive Sandwich Attacks
The Solana Foundation has made a strong move against a group of validator operators who were participating in sandwich attacks on traders, a deceitful practice that has been causing issues in decentralized networks.
This action is in line with the Foundation’s regulations that prohibit such harmful activities and their dedication to protecting the honesty and reliability of the Solana ecosystem. The Foundation is focused on safeguarding retail investors from being taken advantage of.
Solana Foundation Removes Validators Engaged in Sandwich Attacks
Sandwich attacks take advantage of the way transactions are sequenced on blockchain networks like Ethereum and Solana. A malicious individual places an order before a pending transaction and another right after it. By doing this, they can manipulate the price of the asset to benefit from the price difference. This unethical strategy ensures that retail investors get the worst possible price while the attacker profits.
The validators who were found to be involved in mempools that facilitate sandwich attacks have been removed from the Solana Foundation’s delegation program. Tim Garcia, Solana’s validator relations lead, made the announcement of their removal on Discord, stressing the Foundation’s strict stance against malicious behaviors.
According to Garcia, validators who take part in harmful practices, such as using private mempools for sandwich attacks, will be immediately expelled from the delegation program.
It’s important to note that the Solana Foundation Delegation Program aims to support validators by assigning them SOL tokens to reduce the burden of holding a large token reserve. Validators, chosen based on their performance, are responsible for creating blocks and verifying transactions. However, being a validator comes with specific requirements and expectations of ethical conduct.
Mert Mumtaz, co-founder of Solana RPC provider Helius, pointed out the serious consequences of operators exploiting retail users for personal gain. Mumtaz revealed that some validators had adjusted their setups to enable sandwiching on Solana.
This adjustment allows validators to manipulate the order of transactions to maximize their profits. They exploit transactions to benefit from price changes, leading to higher costs and slippage for users.
Solana’s Move Towards 100% of Priority Fees For Validators
In a recent development, Solana validators will now receive 100% of priority fees from transactions on the network after a governance proposal was passed with a 77% favorable vote. This change aims to encourage validators to prioritize network security and operation, addressing concerns and promoting transparency.
However, some stakeholders have raised concerns about the potential impact of the proposal on the network’s inflation rate. They note that priority fees were not present in May 2023, indicating a potential annual inflation rate of around 9.9%.
Previously, half of the fees from priority transactions were removed, sparking worries about validators engaging in “side deals” to receive more SOL tokens. Some of these deals are disguised as the MEV (Maximal Extractable Value), allowing them to manipulate prices. In support of this, a recent arbitrage bot operator named 2Fast made a profit of $1.8 million from a single transaction bundle using MEV.
Meanwhile, crypto investor Brian Kelly has suggested that Solana could potentially be the next cryptocurrency to have a spot ETF in the US.
However, there is skepticism around this idea, with experts like Nate Geraci suggesting that a Solana ETF may not materialize until Congress establishes a clear regulatory framework for cryptocurrencies other than Bitcoin and Ethereum, or until a Solana futures product is listed on a major exchange.
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