- Solana validators face high costs, mainly due to vote fees, hindering entry into the space.
- Ethereum’s BLS aggregation lowers costs; Solana might adopt similar measures in the future.
Leaders of Ethereum (ETH) and Solana (SOL) have long discussed several cryptocurrency-related topics.
The Solana Foundation has drawn a lot of attention lately for its crackdown on validators who use MEV (Maximum Extractable Value) sandwich attacks. In order to lessen these attacks, the Foundation stopped funding certain validators.
Keeping up a Solana validator node is expensive—roughly $65K annually. Often, this substantial cost requires financial assistance from the Solana Foundation. On the other hand, hardware and other resources aside, an Ethereum validator costs 32 ETH up front.
Solana and Ethereum: Cost Differences Explained
Founder of Solana Anatoly Yakovenko pointed out Ethereum’s better investment in its consensus technology in order to overcome the pricing difference.
Ten times as many honest nodes on Solana face an economic hurdle to consensus as on Ethereum, claims Yakovenko. The investment Ethereum made on BLS (Boneh-Lynn-Shacham) consensus message aggregation is mostly to blame for this.
Economic barrier for honest nodes participate in consensus on solana is 10x higher than ethereum atm. Largely due to the investment ethereum has made into bls aggregation for consensus messages.
Maybe that’s something that solana will implement eventually, maybe it will be…
— toly 🇺🇸| bip-420 (@aeyakovenko) June 10, 2024
The BLS scheme, an effective signature mechanism that Ethereum uses, reduces overall costs by effectively aggregating several independently validated messages by validators. Yakovenko suggested that Solana may someday switch to a similar method, even if its current mechanism differs from Ethereum’s.
Future Implementation Prospects
Yakovenko proposed that Solana might later put such a mechanism into place, maybe with voting subcommittees.
The cost per vote and the economic barrier will go down as hardware advances, since the lower-bound fee for transmitting a message to the entire cluster will decrease.
One user asked how Solana would handle the fact that voting fees increased most expenses. Yakovenko retorted that by rotating committee members, voting subcommittees might cut vote costs by lightening the vote load.
Dominance of Vote Transactions
Solana dominated block transactions last week, with 80% of all transactions pertaining to votes. Validators bear the cost of vote transactions, which include fees like other transactions; voting costs are a major cost driver and entry barrier.
It is unclear if the blockchain will use Yakovenko’s suggested fixes. SOL has dropped 6% in the interim as cryptocurrency investors de-risked in advance of the FOMC (Federal Open Market Committee) meeting.
Meanwhile, SOL is trading at about $150.18, down 2.43% over the last 24 hours and showing a bearish trend with a 13.39% drop over the previous 7 days, according to CoinMarketCap.
On the other hand, ETHNews reported that PayPal had launched PYUSD on Solana with the goal of achieving faster transaction speeds and reducing expenses necessary for retail payments.
This integration highlights Solana’s ability to enhance payment systems, even with its present difficulties.
SOL fell to $145 on June 11th, the lowest point since mid-May, as market liquidation persisted throughout the board.