Solana validators time game: rewards can be increased by 3%, raising concerns about network centralization

[Coin World] A new report found that validators do not always adhere to the rules set by the Blockchain. Solana (SOL) has long faced issues with malicious validators. On Wednesday, August 13, the Chorus One research team released a report detailing how validators manipulate the blockchain to gain additional rewards. The report shows that validators can slightly delay block production to pack more transactions into their allocated slots. Since validators earn rewards from transaction fees, this strategy allows them to collect more fees per computational unit.

By combining time gaming with computational optimization, validators can increase their rewards by up to 3.00%. Although this number may seem small, the costs for most validators are fixed, which means the additional rewards will directly translate into higher profit margins.

"Our analysis shows that time gaming and latency optimization can have a significant impact on validators' rewards on Solana. When combined, they yield the highest gains—total rewards of up to 3.00%, or 27 basis points annually—primarily through increased MEV extraction and improved fee capture," the report stated.

The problem with time gaming is that slowing down Block production affects the inflation mechanism, thereby reducing the rewards earned by SOL stakers, while increasing the earnings of the validators engaged in this practice. These benefits tend to favor large validators who have advanced hardware and a significant amount of staked assets, putting small operators at a disadvantage and leading to network centralization.

To address this issue, Chorus One recommends that Solana update or replace its main validator client Agave. The competing client Firedancer offers considerable efficiency without introducing slot latency, effectively eliminating the time advantage.