Value and Prices for Solana Validators

DoubleZero was first envisioned to support validators, tailoring its filtration and connectivity features to optimize the block-building and consensus processes, and especially the Solana validator set. DoubleZero can support the efficacy of Turbine, reduce slot times from 400ms, and enhance the performance of the Agave and Firedancer clients.

In exchange for these filtration and communication services, the DoubleZero protocol proposes to charge each validator a “seat fee.” This seat fee is set at 5% of the validator’s consensus-related revenue streams, denominated in SOL (or the native token of the L1 for future networks).

This model — flat seat fees, as a percentage of revenue, denominated in SOL — is useful for both aligning incentives and easing operational complexity. As compared to a pay-per-byte model, this one both encourages an abundance mindset (wherein validators are not disincentivized to limit communication) and directly aligns the DoubleZero protocol with the validator set. Finally, the commission rate of 5% is chosen to align with current Solana commission rates.

The Value Proposition to Solana Validators

As outlined in the whitepaper, validators who join DoubleZero receive filtration and connectivity services. But those can be made more concrete in the case of Solana, where DoubleZero offers six types of improvements.

1. Filtration: DoubleZero filters away transactions that are duplicated or that have malformed signatures at common ingress points using bespoke hardware, which is important the performance of the Agave and Firedancer clients. Anza’s article On the Road to 1M TPS identifies that the current Agave client, which schedules transactions “after other expensive operations such as signature verification,” is vulnerable to wasting effort on a flood of incorrectly-signed packets. Moreover, data from a set of validators running the Frankendancer client (including Staking Facilities, Asymmetric Research, RockawayX, Cogent Crypto, and Trillium) shows that some 75% of inbound transactions (as measured from epochs 726 - 750) are duplicates.
2. Slot Times: DoubleZero pairs with the validator client improvements to offer a pathway to lower slot times, on two fronts. Most directly, dedicated connectivity lowers both the latency and jitter of information transmission, by replacing inefficient and random routing with direct and deterministic routing. More subtly, however, DoubleZero — by virtue of the capacity on the network — can offer more creative solutions, such as a wider Turbine fan-out, which allows blocks to propagate more quickly.
3. Block Size: While Solana block sizes are migrating from 48 to 50 million compute units and may go to 60 million units, a dramatic step change (e.g. a doubling, tripling, or more of block size) remains difficult. Anza notes in that same article: “as blocks grow significantly in terms of bytes, the median block distribution time can start exceeding 400ms for certain workloads.” However, DoubleZero has the bandwidth capacity to circulate blocks that are orders of magnitude larger, removing at least one bottleneck to larger blocks.
4. Voting: Latency matters acutely for voting, which in turn reduces the time to finality. The status quo, in which timely vote credits are awarded fully for votes that happen within two slots of the block, works well — but that cutoff was set to allow for a full second of latency via the public internet (when in fact the roundtrip latency around the globe is a seventh of that). DoubleZero can offer lower latency, which both means that votes will naturally accumulate faster and timely vote credits can potentially reward next-slot voting only.
5. Geographic Reach: Validators today struggle to operate in regions like South America, Africa, and Australia, due to substantial latency of the public internet. Indeed, approximately half of Solana’s stake is in London, Amsterdam, and Frankfurt. By offering direct connectivity, DoubleZero makes operating in some of these frontier locations more viable, allowing Solana to decentralize further.
6. RPCs and MEV Participants: Much of the infrastructure surrounding the validator set can benefit from DoubleZero, and that infrastructure can generate more value for users and validators alike. More predictable delivery from RPCs allows for more timely (and thus more valuable) transactions to reach the leader. Lower latency from searchers and the Jito block engines allows for more valuable trades and bundles to reach the leader.

These advantages get further magnified by features like future multicast, where the network — rather than the validator — does replication of packets. This alone reduces latency and conserves bandwidth; but more critically, it can transform certain systems like Turbine — moving it from the status quo, i.e. a waterfall of shreds sent out in sequential steps, to a simpler and faster model, where the block is transmitted a single time and reaches all validators on the most direct path.

The six improvements can be combined into a more abstract visualization, which plots the value accruing to a single validator as a function of the share of the validator network and the share of the RPC/MEV ecosystem on DoubleZero.

This visualization summarizes various scenarios. For instance, if no validators or RPC/MEV participants are on DoubleZero, an incremental validator would still receive some baseline value from filtration. As validators join the system, the value to an incremental validator grows: it sends and receives blocks faster, and can potentially expand into new regions. There is a critical step change at 2/3 of the stake, where the protocol itself can make certain changes (e.g. shorter slot times or larger blocks) safely. Separately, suppose there are no validators on DoubleZero but RPC/MEV participants join instead. The incremental validator benefits from better delivery of these systems, which offer more priority fees and MEV rewards, and this is a fairly linear increase. Put together, the following visualization sketches out the entire value curve to a validator across these two dimensions, where light colors are higher than dark colors.

The Economics of Seat Fees

Seat fees, and more specifically a share of consensus-related revenue denominated in SOL (set at 5%), might seem like an unusual pricing model, especially compared to the more standard pay-per-byte model. However, this particular model has both economic and operational advantages.

DoubleZero is a network, and so almost tautologically, network effects are its heart. As the value function diagram shows, the more users who use it, the better the network becomes. Thus, it is critically important for the pricing model to not disincentivize traffic. Fees that are conditional on usage, i.e. fees that impose a marginal cost per transaction sent, would fail to leverage these network effects properly. Even for the same total cost outlay, validators would be disincentivized on the margin to communicate with one another, both in terms of breadth and depth. Validators would perhaps reserve DoubleZero for communication only with high-stake validators or high-value packets, and instead use the public internet for low-stake validators or low-value messages.

By contrast, seat fees do not impose a marginal cost per unit of information sent. Validators are encouraged to have an abundance mindset, rather than a bean-counting one. As soon as one of its peers joins DoubleZero, it should communicate freely with that validator and not condition traffic on whether any particular packet meets some threshold of value.

Seat fees also align incentives with the DoubleZero protocol. The project is more successful when validators earn more; and it languishes if revenue streams are stagnant or declining. Rather than being compensated from intermediary metrics that only partly proxy for success, like bytes sent or connections created, it earns compensation directly from the validators’ bottom lines.

Operationally, seat fees offer three advantages. First, by paying a percentage of fees in the native token, the model innately hedges negative shocks to validator earnings. If an epoch elapses with mediocre revenue streams or the price of SOL has a sudden market correction, the DoubleZero fee automatically adjusts down too. By contrast, fees that are fixed at some nominal value of SOL and/or denominated in the 2Z token could accidentally become far too expensive, relative to revenues, in those scenarios.

Second, this model does not require operational management. Validators do not need to top-up accounts in a non-native token, which can lead to mistakes and temporary outages. Instead, a smart contract deployed by the validator automatically diverts the 5% of fees towards DoubleZero without manual intervention.

Finally, this model is simple to understand. In principle, DoubleZero could try to calibrate fee rates, e.g. higher rates on Jito, priority fees, and voting (where latency matters), lower rates on base fees, moderate rates on inflationary rewards, etc. But this would lead to unnecessary complexity, and would deliver little in the way of positive economic behavior. Thus, it opts for a flat fee that is consistently applied.

Solana Commission Rates

Finally, DoubleZero seat fees — in quantitative terms — must strike the right balance. They should be in line with existing Solana commission rates, while also ensuring that the underlying connectivity infrastructure can meet its internal rates of return.

To understand this balance, consider the revenue that validators already earn using delegated tokens in building blocks and generating consensus. This revenue comes from multiple components (all of which would be subject to DoubleZero’s seat fee): listed commissions on inflationary rewards, commissions on Jito rewards, and direct fees earned from base fees, voting fees, and priority fees. One can calculate effective commission rates accordingly, as the difference between all value generated from staked tokens and value remitted to those tokenholders (divided by that first term), under various assumptions. Endnote #1 has further details on the methodology.

The resulting plot below shows that commission rates vary under various scenarios, but they range from 15 - 25% depending on which combinations of SIMDs are implemented. This puts the 5% seat fee for Solana validators in context.

Endnotes

[1] The data for this table comes the Blockworks Solana Financials tables, as of March 13, 2025 and with explanations from Dan Smith. It uses realized data for 2025 until that point, and considers five categories: base fees, voting fees, inflationary rewards, priority fees, and Jito rewards. Base fees and voting fees are assumed to be split 50% to validators and 50% to all tokens (due to burning), of which approximately 65% of that value goes to staked tokens specifically (as the split between staked and unstaked tokens). Priority fees have the same treatment prior to SIMD-096. After SIMD-096, they are assumed to accrue 100% to validators; and after SIMD-123, they are speculatively assumed to accrue 50% to validators and 50% to staked tokens (though validators may choose to set higher commission rates, or possibly even lower ones). The Blockworks data explicitly breaks out inflationary rewards and Jito rewards, along with commissions kept from validators and Jito for those kinds of rewards.