Solana Foundation Expels Validators Over "Sandwich Attacks"

The Solana Foundation has expelled several validator operators from its delegation program due to their involvement in "sandwich attacks" against network users, which undermine the network's integrity. This decision highlights the growing competition between Solana and Ethereum and raises concerns about network governance and the ethics of validator operations.

Tim Garcia, the Validator Relations Lead, announced the expulsion via Discord, stating the decision is final and enforcement actions will continue against operators participating in mempools that enable sandwich attacks.

Mert Mumtaz, CEO of Helius Labs, explained that a sandwich attack is a manipulative trading strategy where attackers exploit transaction ordering to disadvantage retail investors. Although Solana's client doesn't natively support mempools, some operators have modified their validators to enable such attacks. Mumtaz emphasized the Foundation's commitment to protecting retail users and noted that the expelled operators can still operate on the network but will no longer receive Foundation subsidies.

Intensifying Solana vs. Ethereum Rivalry

The incident has sparked criticism from the Ethereum community, including investor Ryan Berckmans, who questioned Solana's approach to managing MEV (Maximal Extractable Value) issues and its seriousness as a settlement layer. Berckmans criticized Solana for withdrawing financial support from validators extracting MEV, arguing that Solana is not a credible settlement layer.

Mumtaz countered Berckmans' criticisms, highlighting the differences in financial and operational requirements between Solana and Ethereum validators. He pointed out that Solana validators have lower setup costs compared to Ethereum's 32 ETH minimum stake requirement and noted that Solana validator revenue has often surpassed Ethereum's.

Lucas Bruder, CEO of Jito Labs, defended the Foundation's actions, emphasizing the alignment of interests between the Foundation and the network. He argued that stakers should support actions that ensure the network's success. However, Bruder also acknowledged the dominance of memecoin trading on Solana and the potential risk of alienating this user base.

Ryan Berckmans reiterated his critique, suggesting that if the Solana Foundation doesn't incentivize validators to stop extracting max MEV, memecoin traders might switch to other fast, cheap chains with less potential for MEV extraction, like Ethereum's Base L2. He warned that this could reduce Solana's competitiveness and lead to a decline in network usage.

Governance and Technical Challenges

This ongoing debate highlights the intense rivalry between Solana and Ethereum and underscores the complexities of governance in decentralized networks, the challenges of managing MEV, and the strategic decisions that can significantly impact blockchain ecosystems.

As of now, SOL is trading at $158.03.