The Silent Rise of Stake Pool Plutocracy in Solana

Key Summary:

• Solana’s stake distribution is increasingly concentrated, with a small group of large validators controlling a significant share of network power, undermining the network’s decentralization ideals.
• On-chain governance is heavily influenced by dominant validators, as seen in recent SIMD proposals where top validators largely determined voting outcomes.
• Liquid staking derivatives (LSTs) such as mSOL, bSOL, and JitoSOL contribute to a secondary layer of centralization by directing stakes to selected validator sets, reducing true stakeholder agency.
• Comparative analysis with Cosmos and Polkadot shows that although stake concentration is a common issue across chains, Solana’s combination of validator dominance and LST reliance presents unique and more acute risks.
• The major technical risk lies in network halts, where crashes affecting major validators could disrupt consensus and require coordinated restarts.
• Proposed solutions include promoting stake delegation to smaller validators, diversifying LST providers, enforcing governance transparency, and strengthening fail-safe mechanisms to protect network operations.
• Without corrective action, Solana risks evolving into a semi-centralized network, contrary to its foundational promise of decentralization and resilience.

Solana is known as a high-performance network with an open validation structure. With 65,000 Transaction-Per-Second (TPS) and low transaction fees, Solana is an alternative to Ethereum for handling large transaction execution loads.

Around ~2000 active validators on the Solana network currently demonstrate the strong decentralized power of Solana. Despite the large number of validators, some stakes are concentrated in a few large stake pools. This phenomenon is called staking plutocracy: the network is controlled by a few parties with dominant staked assets. Large stake pools such as Helius, Binance Staking, and Coinbase are very dominant in the ecosystem.

The consequence of this condition is power in governance, rewards, and network security. This stake concentration goes against the basic principle of blockchain decentralization. Because if one or more large entities have problems (regulation, collusion, attacks), the state of the network can be disrupted.

The Solana network is technically decentralized as evidenced by the number of validators, but practically it is moving towards a plutocratic system as evidenced by the dominant stake pool to a few entities. In comparison, the dominant stake pool can be compared to traditional financial institutions in a decentralized system. This research tries to prove and measure the extent to which the dominance of validator stake pools affects the network.

Who Really Controls Solana? Mapping the Stake Pool Giants

Using validator stake data — Solana epoch 773, batch 1351373 from the topvalidators.app website, here is a brief summary of the stake pool conditions for each validator.

Dominant validator analysis on Solana network — epoch 773. Source: Dune Analytics

Helius is a validator that dominates the stake pool with a stake amount of around 13.9M, and this amount is 3.57% of the total stake of all validators. The Helius validator location also uses 6.4% stake concentration from the validator location.

Analyze total staked assets of validators, total staked top 10 and how stake distribution using Gini Coefficient & Lorenz Curve. Source: Dune Analytics

The top 10 validators in stake dominance reached 84M Sol, or 21.7% of the total stake of all validators. This proves that some validators dominate the Solana network stake pool. The Gini coefficient and Lorenz curve of the stake pool explain that there is an inequality of stake distribution in the Solana network.

The unequal stake distribution proves that Solana is centralized in a decentralized system. The Lorenz curve shows a sharp inequality, with most validators having very few stakes. Moreover, some dominant validators such as Helius, Galaxy Digital, Coinbase 02, Ledger by Figment, and Figment are large institutions in the field of blockchain infrastructure, digital financial services, or exchanges backed by various VCs and institutions.

The Gini coefficient and Lorenz curve data illustrate the unequal and uneven distribution of stakes, indicating the potential for plutocracy.

Governance in the Hands of a Few: The Rise of Validator Oligarchy

Although governance vote participation is optional for validators, some SIMD votes are heavily influenced by dominant validators. In the Solana network, voting power is directly proportional to the number of staked tokens.

The figure below is a summary of some SIMD votes using SIMD-98, 123, and 228 data. The SIMD-098 proposal prioritizes Solana’s data-splitting protocol based on validator stake weights, with a majority result status of agree. This proposal can reduce latency for high-stake validators and increase network speed. Proposal SIMD-123 seeks to modify block fees by requiring validators to distribute a portion of transaction costs and priority tips to stakers, with a majority result status of agree. Proposal SIMD-228 wants to change the fixed inflation model to be dynamic according to the staking participation rate. If the stake rate reached 65% then annual SOL inflation would be reduced to below 1%. The proposal was rejected as it did not pass the threshold of 75% yes.

Governance power analysis of the top 10 validators Solana. Dominant validators play an active role in voting for SIMD to represent their staked users. Total shared power of dominant validators according to their staked asset dominance. Source Dune Analytics

Coinbase 02 — the fourth dominant validator, has more voting power in governance. But in general, the top 10 dominant validators always participated in the SIMD proposals used as case studies. Helius took a prominent role in SIMD-98 & SIMD-123 with a total of 3.5% of the total votes of all validators. Coinbase 02 took a prominent role on SIMD-228 with a total of 3% of the total votes.

The total votes of the top 10 validators practically determined the final outcome of the proposal. It shows that the pattern of validators tends to be against proposals that reduce revenue sharing opportunities to stakers. While the SIMD-228 proposal was well-intentioned by preserving the value of the SOL in the long term, voters tended to disapprove as it would be a burden to validators and small stakers. Meanwhile, approved proposals such as SIMD-98 and SIMD-123 tend to emphasize the dominance of large validators. Such as SIMD-98 to break down Solana data based on weighted staked scores and set a minimum commission. While the intention is good to prevent zero-fee practices, the minimum commission set makes dominant validators more attractive than small validators.

Dominant validators act as gatekeepers of governance, determining proposals according to the interests of validators, stakeholders, and the network. Although decentralized, the voting decisions of dominant validators will seek to favor them and the network. This creates a risk of decision oligopoly and weakens the principle of decentralization. At the end of the day, the dominant validator will look more attractive to stakers because the high number of staked provides a sense of security.

The current state of Solana’s network governance aspirations is illustrated by the dominance of voting by a few dominant validators, so that the results of decisions often favor the interests of dominant validators — which still represent the aspirations of user stakers.

Liquid Staking’s Double-Edged Sword: Convenience vs Control

Liquid staking in Solana (such as mSOL, bnSOL, JitoSOL, etc.) opens up the potential for greater liquidity, but at the same time concentrates stakes to select validators. The data shows that some dominant validators rely heavily on stakes derived from liquid staking tokens (LST).

Analysis of the dominance and distribution of LST staked assets. Many small validators rely on LST assets as their main staked asset, some dominant validators also rely on LST. Source Dune Analytics

Binance controls the LST market with ~8M LST bnSOL, Bybit fills has ~1.3M LST stake in bbSOL which is ~95.44% of its total delegated stake. Whereas Helius is more conservative with a total LST stake of ~616k in the form of heliusSOL & bSOL, this amounts to ~5.47% of the total delegated sol.

Some validators rely more than 90% of their stake on LSTs such as bnSOL, mSOL, or JitoSOL. This number shows the dependency on LST providers. It is understandable if the dependency comes from small validators, but if it involves large validators such as Helius, Binance, or Bybit who should have the capacity to maintain independent stakes.

The total TVL of the LST is dominated by several LST assets. Source Dune Analytics

While the original goal of liquid staking was to unlock the utility of staked tokens in network participation, the TVL of liquid tokens shows concentrated participation in a few large tokens such as bSOL (BlazeStake), mSOL (Marinade), and jitoSOL (Jito). LSTs with low TVL have almost no governance power and make the network more vulnerable to “centralization” of governance between dominant LSTs.

Most LSTs use their own validator sets, which makes the dominant LST’s preferred validators receive more stake than other independent validators. This rule makes Solana’s validator stake distribution worse because it leads the network to be dominated by validators chosen by the LST provider, rather than the staked token holders themselves.

If this condition continues to persist, if there is an exploit, hack, governance failure, or regulatory issue against a large LST. Then it is easy to ensure that most stakes will be inactive, not liquid, or can be forced to mass unbounding.

LST ultimately creates a new centralization in the network. Instead of the dominant validator controlling security, the LST provider controls the stake validator. If something goes wrong at the LST provider level, there will be a domino effect especially since many validators rely on LST as the foundation of their validator’s staked assets.

Some validators rely heavily on liquid staking, creating a new layer of centralization and deepening dependency on LST provider validators.

How Centralization Creeps In: Risks Beyond Performance Metrics

The narrative of Solana’s centralization has long been emerging, supported by evidence of stake concentration and voting power. Solana was designed to be a fast network without sacrificing decentralization. However, the current state of affairs suggests it is centralized with potential risks of governance attacks, censorship, and market dominance.

Well, it is easy to understand if the dominant validator has strong voting power in order to secure the network. However, the validator set condition of the LST provider makes it difficult for small or independent validators to get stake assets. Because liquid staking aggregators prefer validators with performance/MEV criteria, not decentralized diversification.

Based on cumulative stake per-validator data, acquiring full control over governance is difficult. With a minimum threshold of 50% of staked assets hacked, by data it’s difficult to force the shutdown of many small validators and acquiring the staked assets of the top 10 dominant validators which total 21.66% does not reach the minimum threshold of governance attack. Moreover, there are risks that often occur on the Solana network that affect performance.

The most realistic risk is Network Halt, as has happened several times due to validator overload and forking issues. If the dominant validator crashes in executing transactions until other validators have an impact totaling more than 30% as a threshold. Then the network will be stuck until there is a hard restart from each validator.

The risk of stake concentration poses a threat to Solana not only from the technical sector, but the internal structural vulnerability to centralization.

Comparing Centralization Across Cosmos and Polkadot

One-sided analysis — even if data-driven, remains less robust without comparisons across chains. Comparing it with other chains is important to assess how centralization risk evolves in some other ecosystems. The goal is to understand where the Solana network stands, test the hypothesis that other networks may have similar patterns due to favorable architectural design and other reasons.

Comparing Solana’s stake pool distribution with Cosmos and Polkadot. Using Solana validator data epoch 773 (17/04/2025), Cosmos validator data (28/04/2025) and Polkadot validator data (28/04/2025).

Solana

Solana uses the Proof-of-History (POH) mechanism to support fast transaction execution and throughput. Proof-of-Stake (POS) is used for network security and decentralization. Using Solana validator data, we found that with a total of 2688 validators and %stake rate of the total supply of 65%. The distribution of the stake pool is quite concentrated in the top 10, which is 21.66% of the total staked. Of all the staked assets, many validators rely on >90% of their staked assets in the form of LST.

Cosmos

Cosmos uses Proof-of-Stake (POS) to secure the network. Using data obtained on Cosmos analytics websites such as https://analytics.smartstake.io/Cosmos/, it was found that with 180 validators and a stake rate of 59.1% of the total supply. The stake pool distribution is fairly even with 44.5% owned by the top 10 but other validators have an even total staked.

Polkadot

Polkadot uses a hybrid mechanism in its network architecture design, Nominated Proof-of-Stake (NPOS) to validate and secure the network, GRANDPA (GHOST-based Recursive Ancestor Deriving Prefix Agreement) to achieve block finality, combined with BABE (Blind Assignment for Blockchain Extension) to create block production. Using polkadot stake data https://staking.polkadot.cloud/, we find that with 600 total validators and a stake rate of 54.43% of the total supply. The Polkadot network is quite fair in the distribution of the stake pool, where the top 10 dominant validators only hold 0.27% of the total staked assets in the Polkadot network.

Solana is not alone in facing the problem of stake concentration, the Cosmos network which is not absolutely the same in its mechanism also has inequalities in its stake distribution. The main difference is the number of validators. With only 180 validators, Cosmos has a relatively easy time managing stake distribution and achieves a 0.703 Gini coefficient. While Solana with a total of 2688 validators gets a 0.9 Gini coefficient, this value is quite large indicating many small validators with a small number of stake assets. Compared to Cosmos, with a smaller number of validators it is quite easy to divide the stake pool more fairly.

The Polkadot network is the fairest in managing stake pools. Stake rate >50% with gini coefficient 0.073 makes Polkadot fairer in sharing stake pools even though there are fewer validators. Even so, Solana still has better resiliency because it has more active validators than the other chains used for comparison. The challenge is how to ensure that stake distribution is not concentrated in a few pools, especially from liquid staking derivatives.

Turning the Tide: How Solana Can Reclaim Its Decentralization Promise

While large validators have a better image in terms of performance and responsibility, Solana’s stake pool is dominated by only a few validators. With about >2000 total validators, it shows that many entities have trust and want to participate in maintaining the network.

The risk of Network Halt is well understood because the Solana network is capable of executing transactions quickly. So that a large sequence of transactions might disrupt the consensus process. Fail-safe mechanisms for “self-healing” are needed with a more adaptive quorum during failover conditions.

Liquid Staking Asset should be a concern, many validators rely on LST in their staked assets. LST was created to unlock new utility in native staked assets so that they can be reused in the hope of new sources of incentives. However, it’s also necessary to limit the dominance of a single LST provider. Either by imposing a cap on the maximum percentage of staked assets, or increasing the number of LST providers for diversification. As well as Audit and open governance for LST providers to prevent “black box” stake control.

Facing the challenges of scalability and validator dominance, Solana needs to optimize decentralization by stake redistribution, maintaining a healthy liquid staking ecosystem, and monitoring network activity based on on-chain data. With these changes, Solana not only maintains high performance, but also builds the foundation of a decentralized blockchain ecosystem.

Resources

• Solana Validator Data epoch 773, batch 1351373 (https://topvalidators.app/, https://stakeview.app/stakes)
• TVL and Stake Data (https://defillama.com/)
• Solana Staking, Validators, and LSTs Dune Dashboard (https://dune.com/ilemi/solana-staking, https://dune.com/wajimaa/sol-validator-and-gov-power)
• Cosmos Validator Analytics (https://analytics.smartstake.io/cosmos/validators/Bonded#staking)
• Polkadot Stake and LST data (https://polkadot.subscan.io/validator, https://bifrost.io/vtoken/vdot)