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Earn 6.8% APY staking with Solana Compass

Help decentralize and secure the Solana network delegating your stake to us and earn an impressive 6.8% APY yield on your SOL, while supporting us to create new guides and tools.

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Breakpoint 2023: Journey to Becoming a Validator

Explore the intriguing world of blockchain validation and the journey of becoming a validator on Solana's network.

The notes below are AI generated and may not be 100% accurate. Watch the video to be sure!

Summary

Breakpoint 2023's panel discussion, 'Journey to Becoming a Validator,' provided insights into the world of blockchain validators, focusing on the Solana network. The conversation featured Dan Albert, Executive Director of the Solana Foundation; Lucas Bruder, CEO of JITO Labs; Michael Hubbard, Founder of Validator 'lane' on Solana, and Jonny, Founder of Solana Compass. They discussed the motivation for running network infrastructure, challenges and solutions for validators, earning and costs, and the importance of community engagement. The insights shared offered a roadmap for prospective validators, shedding light on the technical and community-driven facets of blockchain validation on Solana.

Key Points:

The Role and Challenges of a Validator

Validators are essential players in the blockchain ecosystem. They are responsible for operating network infrastructure, validating transactions, and maintaining the decentralization and security of a blockchain. However, becoming a validator, especially on high-performance networks like Solana, involves overcoming technical and financial challenges. Validators must set up robust hardware to handle the network demands and manage on-chain costs effectively to ensure their operations are financially viable. The session highlighted validator experiences starting on the Solana network and the mix of curiosity and commitment to the technology that led them to become validators.

Community Engagement and Building a Brand

Community engagement emerged as a vital component for successful validators. Spearheading educational content, being active in discussions on social media, and providing valuable insights to the blockchain community can help validators attract stake and build trust. Validators must adopt a public profile and generate informative content, become thought leaders in the space, and participate actively in online communities to market themselves and attract delegators. It's a continuous effort of trying different methods and being present in the community to gain visibility and stake.

Validator Economics and Sustainability

Finding an equilibrium between costs and revenue is crucial for validators. They incur on-chain transaction costs for voting, and these costs can accumulate quickly. Validators must earn enough through staking and block rewards to cover these expenses and potentially make a profit. The panel shared personal accounts of reaching an on-chain breakeven point and stressed the advantages of various stake pools and delegation programs designed to support validators early in their journey. Furthermore, savvy monitoring and adapting to network changes were cited as good practices to maintain profitability and service quality.

Validator Diversification and Support from Stake Pools

Stake pools offer pathways for new validators to earn necessary stake support by fitting specific criteria set by these pools. There is a diverse array of pools with different delegation strategies, creating a range of opportunities for validators. For example, GEDO Sol, run by GEDO Labs, utilizes algorithmic delegation based on validatorsā€™ performance and other criteria. Fitting into stake pools' requirements can significantly bootstrap a validator's journey towards becoming a sustainable operation.

Facts + Figures

  • Validators on Solana incur on-chain transaction fees that can sum up to over 30 Sol (~$1,000+) each month.
  • Running a high-performance validator node can cost hundreds of dollars in hardware expenses.
  • The Solana Foundation offers a delegation program to aid new validators in starting, although it has a lengthy waitlist.
  • Consistent participation in communities, creating a strong brand, and active marketing are essential to attract stake as a validator.
  • It's possible to reach on-chain breakeven in as little as two months with aggressive community engagement and branding efforts.
  • Essentially all validators have the potential for profit depending on their staking pool, commission rates, and efficiency.
  • GEDO Solana's validator client can provide additional benefits through the block engine, which increases the revenue opportunity for validators.
  • The standard for being included in the block producer schedule on Mainnet is approximately having 5,000 Sol staked.

Top quotes

  • "Running a validator is a business, it's delegated proof of stake, right? So, delegators are your customers."
  • "Validators must adopt a public profile and generate informative content, become thought leaders in the space."
  • "It's possible to reach on-chain breakeven in as little as two months with aggressive community engagement and branding efforts."
  • "There's a real urgency that you're able to react to that. And so, you know, absolutely, you should be working on testnet before you start."

Questions Answered

What is a blockchain validator and why are they important?

Blockchain validators are critical to the health and function of a blockchain network. They validate transactions, maintain the blockchain's integrity, and promote decentralization. By running network infrastructure, validators help to ensure that a blockchain remains secure, resilient, and capable of processing transactions effectively for all users.

How does one become a validator on the Solana network?

To become a validator on the Solana network, you need to set up a node with the necessary hardware that meets the network's performance requirements. This involves understanding the technical aspects of blockchain validation, taking part in community engagement, and potentially participating in delegation programs to secure stake.

What costs are involved in being a validator?

Being a validator incurs several costs. These include the hardware necessary for running the node, which can be expensive due to the high-performance requirements of networks like Solana, as well as on-chain transaction fees for voting, which can amount to significant costs over time.

How can a new validator attract stake and become profitable?

New validators can attract stake by engaging with the blockchain community, creating valuable content, building a brand, and making use of stake pools and delegation programs. By gaining the trust of the community and demonstrating their value and commitment, validators can encourage investment through staking and eventually reach profitability.

What are stake pools and how do they support validators?

Stake pools are mechanisms designed to distribute stake among multiple validators based on specific criteria. Each stake pool has its own delegation strategy, which often aims to improve the blockchain ecosystem. Validators can position themselves to receive stake from these pools by aligning with their rules and optimizing their operations accordingly.