‘More Decentralized Than People Think,’ According To Solana, But There’s More

July

26

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According to Unstoppable Finance, Solana is more decentralized than other blockchains because of its larger validator count and Nakamoto coefficient.

Unstoppable Finance, a decentralized finance (DeFi) company with offices in Solana, contends that the city is more decentralized than is generally believed. The blockchain platform, according to another viewpoint, is more centralized.

The DeFi company outlines its views in a blog post. It supports the decentralization of the blockchain network with the active validator count, Nakamoto coefficient, and support for validator hardware, which is sometimes criticized for being pricey.

The post claims that, except for Ethereum, Solana has a significantly greater validator count than most other chains. Furthermore, according to Unstoppable Finance, Solana’s Nakamoto coefficient, which gauges the distribution of staked tokens and decentralization, is substantially higher than those of Cosmos and Near Protocol.

Unstoppable Finance contends that Solana has already developed a server leasing business to address concerns about the cost of the validator hardware raised by critics. Some community members cannot accept that Solana is decentralized despite the evidence to the contrary.

According to Twitter user Les teezy, Solana’s network disruptions are not the main issue; instead, the network is “too centralised,” allowing a select few to choose when it is shut down and restarted. The Twitter user emphasized that the web is identical to any old system without decentralization.

A month ago, a Reddit user posing as a software developer referred to Solana as a hoax and contrasted it with the SQL databases used by conventional finance. The Redditor claimed that centralized banking organizations are similar to main groups that can turn back a ledger.

To prevent liquidations, Solend, a lending system built on Solana, started an aggressive action in June to acquire control of a whale’s wallet. The community strongly opposed the change. The team eventually changed course and concentrated on alternate approaches that don’t involve seizing control of the wallet.

Solana’s Decentralization

The development of validator nodes is one facet of decentralization to think about. In the case of Solana, the only organization creating blockchain core nodes is the Solana Foundation. As a result, the network’s total decentralization is decreased because Solana has a centralized point of control. In contrast, Go Ethereum, OpenEthereum, Nevermind, and Besu are among the key node developers constructing Ethereum.

Solana is not the only company with just one core node developer, though. On the framework created by a single entity, several other Layer 1 chains operate. For instance, Ava Labs is the sole developer of the core node for Avalanche.

Understanding how many nodes are currently active on the network and who is in charge of them comes after looking at Solana node development. There are presently 1,161 validators on Solana, according to Solana Beach, giving the network a Nakamoto Coefficient of 19. This indicates that the top 19 validators hold enough staked Solana to coordinate an attack on the web.

Comparing Solana’s score to Proof-of-Work blockchains like Bitcoin and Ethereum, it can be shown that it is technically considerably higher. The Nakamoto Coefficients of these networks are substantially lower, averaging five for Bitcoin and three for Ethereum, as mining pools control a large portion of their hash power.

The SOL tokens granted to Solana validators for staking are far less liquid than the hash rate on Proof-of-Work chains, it should be noted. For instance, in the event of an attack on Ethereum, miners might quickly withdraw their hash power from the malicious pools, stopping further harm. Sadly, anyone who frequently gives their SOL tokens to Solana staking pools can’t withdraw them without waiting an extended period.

About the author, Awi Khan

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