- Dragonfly’s Qureshi called out the blockchain mania for staking and demanded better security models.
- Solana staker income reached an all-time high of $1.5B. Validator earnings jumped to $300M.
Solana [SOL] Staking is once again in the news, after a crypto VC made a very strong critique.
Dragonfly founder says: Haseeb Qureshi, the staking mania is a ‘meme’ and an illusion that doesn’t help with security as initially perceived.
“Staking mania is definitely a little bit of an illusion. This idea that you’re paying for security is kind of a meme.”
Staking is the process of locking tokens such as SOL or transferring them to validators in order to run the network.
In return, the validators or node operators earn ‘rewards’ or staking yield that they can share with their delegators.
Staking and inflation
But here’s the problem — staking is dominated by 12 validator firms across all the proof-of-stake (PoS) chains like Solana, Aptos [APT], Ethereum [ETH]You can find out more about us by clicking here.
Qureshi says that Ethereum has the best security, because of its home stakers.
The current security model has been heavily concentrated in a few validator companies. This centralization risk doesn’t align with the ‘network security’ ethos of staking.
“He added,”
“The security model is not what we pretended it was 6 years ago. As a result, it’s rational if we fix this problem.”
He also viewed stake rewards as taxation and inflation that dilutes other holders.
He also said U.S. ETFs that are based in the United States now want to maximize yield not to dilute their network, but to prevent it from being diluted.
“The things that make L1s secure are not inflation rates. It’s the robustness of the software, and who the validators are.”
Solana co-founder Anatoly Yakovenko agreed Qureshi’s position is consistent with the stance of Qureshi.
Solana’s annual inflation rate, which is fixed at 5%, is directly linked to the incentives given to validators. This increases supply but exposes SOL currency to devaluation and dilution.
Source: Solana Rewards
It was not a good idea to try and cut inflation rates by 80% in early this year. voted Validators who use key codes are a good way to ensure that the data is accurate.
Some members of the community have a new idea. voiced Concerns about the imbalance and maximization of profits by validators has left applications providing staking services fighting over breadcrumbs.
Validator operators will be available in Q4 of 2024. revenue Overall staker revenues across the Solana eco-system reached a new high of 1.59 billion dollars.
Staker revenues in Q1 2025 reached $1.54B. This shows the strong demand for staking during this bull market.
Source: Blockworks
We will have to wait and see how Solana handles the issue of inflation, as well as whether Qureshi’s plea will make any difference to the PoS.
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Source: ambcrypto.com
