Is Solana decentralised?

10 mo
LeoFinance
3 Min Read
610 words

Is Solana decentralised?




With so many questions surrounding the decentralisation of the Solana network, we take a look at the token distribution numbers to make a call.

Each month, the Solana Foundation issues a transparency report.

These reports shows current and projected token distribution and network activity, while also updating investors on general happenings.

This section of our Solana guide takes a look at these token numbers at the end of 2020, to see just how decentralised Solana is.

The Solana (SOL) logo in a horizontal bar.

Spoiler alert: Solana is not decentralised.

How decentralised in Solana?

Let’s dive straight into the Solana transparency report for December 2020.

Simplifying things right now, we have a token distribution of:

  • Total unlocked tokens: 435,361,717
  • Simple agreement for future tokens: 176,949,616
  • Employees and service providers: 48,134,011
  • Founders: 31,250,000

This also doesn’t include the fact that those 31,250,000 tokens earmarked for Solana’s founders, is actually only half of their share.

The other half will still continue to unlock on a monthly basis.

This means that around 60% of SOL tokens are in the hands of founders, early contracted investors, employees and the like.

Making them all essentially insiders under the control of a central authority, or at least having an extremely vested interest in towing the line.

Judging by this token breakdown, the numbers show Solana is actually extremely centralised.

Running a Node on Solana is extremely expensive

Using the token distribution numbers above, we can determine that over half of the total supply is owned by insiders in some way shape or form.

With over two thirds of SOL tokens currently staked, this means that the network is being run entirely by the select elite.

That is not decentralisation.

Adding to Solana’s centralisation woes, is the fact that it’s extremely expensive to run a node on the network.

It literally costs thousands of dollars in hardware to setup, run and maintain a Solana node.

As a result, there are just not enough truly independent nodes running on the network to act as validators.

Nobody is doubting the fact that the Solana network is fast and secure.

But the initial team have not decentralised, and do not plan to decentralise the Solana network in any way shape or form.

With the SOL inflation rate set to keep serving those same insiders who already have such a huge stake in the network, the centralised status quo looks set to remain.

Final thoughts on whether Solana is decentralised

It’s important to note in this final section of our guide to Solana that the issue of network decentralisation is never black and white.

Everyone is going to have a different level of comfort when it comes to the compromise between decentralisation and performance of a blockchain network.

When it comes to Solana, if you’re all about performance at the expense of true decentralisation, then this is the network for you.

If you’re not willing to compromise on the fact that nodes running Solana are controlled (or highly influenced) by a central entity however, then it won’t be.

There’s no right or wrong here and whether you choose to use Solana or invest in the SOL token on the back of what you’ve read here today, is entirely up to you.

Best of probabilities to you.




Direct from the desk of Dane Williams.

Why not leave a comment and share your thoughts on Solana crypto (SOL) within the comments section below? All comments that add something to the discussion will be upvoted.

This Solana crypto blog is exclusive to leofinance.io.

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There are a few projects in Solana that interest me. In the end, that's what matters the most, projects that give value to the network.

Also, I'm not a fan of centralization or massive tokens hold by a few wallets.

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What are the Solana based projects that have got your attention?

I'd love to hear a little bit more about them.

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Star Atlas for example. You can check out here: https://staratlas.com/

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That's good to know. I still don't have any projects on Solana in mind but I will take this into account if I chose to invest in them in the future

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I'm keen to hear some of the Solana based projects that jmsansan.leo is interested in (the comment above).

Might be good for you to check them out too.

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Perfect! Will do!

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And how many SOL can be extracted from each node? because if it is very expensive at least it is profitable?

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This chat on the Solana Reddit talks about how profitable running a SOL node really is.

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Oh that's good to hear - I was thinking I'd missed out on Solana, now I know it's not decentralised I'm not particularly interested in buying.

I'd still like to find out more about it though, but as an investment I think I'll ride this one out!

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Decentralised or not, it's wild to see SOL being one of the first big boys to smash through their previous all time high already.

I have a feeling that this next bull run is going to be immense.

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