<aside> 💡 WORK IN PROGRESS: feedback welcomed
In this collaborative whitepaper, I propose the creation of a new organisation: the Staking Alliance. The Staking Alliance is a community-driven organisation whose goal is to grow and enhance staking on Solana so as to make the Solana network faster, safer, and more decentralised.
The Alliance will be a neutral discussion forum and advocate for staking. It will also build public goods that improve the state of staking, including a new liquidity layer for staked SOL so all staked SOL can participate in DeFi. All contributors from all corners of the Solana ecosystem are welcome to join the Alliance.
In this whitepaper I outline the key issues facing staking today, and propose some public goods that the Alliance could build in order to solve these key issues. I outline what the Alliance would look like and how contributors could help with the Alliance.
The Alliance is a non-profit foundation that is open to all. Its mission is to grow and enhance staking on Solana so as to make Solana faster, safer, and more decentralised. It would be governed via governance tokens.
Stakers don’t have good real-time information about validators. As such, stakers may continue staking with them because they don’t know that their validators are doing a bad job.
There are two main ways in which stakers are underinformed about who they stake with and suffer as a result.
Firstly, validators can change their commissions at any time, and stakers are not informed when they do so. This allows validators to do a “commission rug pull” by setting their commission to 0% for the vast majority of the epoch, then hiking just as the epoch ends. They can then set their commission back to 0% at the start of the next epoch.
Many validators have been caught doing this by Brian Long (see screenshots):
By doing this, a validator could perpetually charge any commission (including 100%, stealing all their stakers’ returns), while displaying 0% fee. A casual user browsing the validator would only see 0% unless they were lucky enough to catch the validator in the tiny window where they hiked their commission.
Secondly, stakers are not alerted when validators go delinquent. Because stakers usually don’t monitor validator performance in real time, a validator can be offline for many hours, come back online, and their stakers would be none the wiser.
We need a single source of real-time information so stakers can protect themselves from malicious validators and make better decisions on who to stake with.
On September 30 UTC, the Solana network went down from 22:41 UTC to 06:57 UTC for a period of 8h16 min. Several validators (PumpkinPool, Shinobi) rightly pointed out that the cluster restart took longer than ideal because many validators did not have adequate alerting infrastructure. Many echoed this sentiment.