Solana’s validator ecosystem is shrinking fast, with the network losing more than two thirds of its validators since 2023. The drop is raising fresh questions about decentralization as higher operating costs and aggressive fee competition make it harder for smaller node operators to survive.

Validator count drops sharply since 2023

The number of active Solana validators has fallen to 795 as of Wednesday, down from a peak of 2,560 in March 2023. This marks a decline of roughly 68 percent, according to data from Solanacompass.

Validators play a central role in the Solana network. They verify transactions, add new blocks, and help maintain the integrity of the blockchain. A sharp reduction in their numbers can increase reliance on a smaller group of operators, potentially weakening decentralization.

Some of the decline can be explained by the cleanup of inactive or so called zombie nodes. However, industry participants say the deeper issue is economic pressure that makes validator operations unsustainable for smaller players.

Smaller validators struggle to stay profitable

Independent validator operators say the economics of running a Solana node have deteriorated significantly. An operator known as Moo wrote on X that many small validators are actively considering shutting down.

According to Moo, the decision is not driven by a lack of confidence in Solana as a network, but by simple financial reality. Large validators offering zero percent commission on staking rewards have made it difficult for smaller operators to attract delegations and generate income.

“We started validating to support decentralization,” Moo said. “But without economic viability, decentralization becomes charity.”

As a result, retail level validators are finding it increasingly difficult to justify the costs of staying online, even if they believe in the long term potential of the network.

Zero fee competition favors large operators

One of the biggest pressures on smaller validators is fee competition. Large, well funded operators can afford to run validators at minimal or zero fees, absorbing losses or offsetting them with other revenue streams.

Smaller operators do not have the same flexibility. When delegators gravitate toward zero fee validators, revenue for independent validators dries up, even as operating costs remain high or increase.

This dynamic risks concentrating validation power in the hands of fewer entities. Over time, the network could become more dependent on large operators, reducing the diversity of participants that help secure the blockchain.

Nakamoto Coefficient signals weaker decentralization

The decline in validator numbers is also reflected in Solana’s Nakamoto Coefficient, a key metric used to assess decentralization. The coefficient measures the minimum number of independent entities required to compromise the network.

Solana’s Nakamoto Coefficient has fallen by about 35 percent, dropping to 20 from 31 in March 2023, according to Solanacompass. This suggests that the network’s staked SOL supply is becoming more concentrated among fewer validators.

A lower coefficient does not mean the network is centralized, but it does indicate that control is becoming less distributed than it was two years ago.

Rising costs raise the barrier to entry

Operating a Solana validator has become significantly more expensive over the past three years, partly due to the rise in the price of SOL, which was trading around $122.94 at the time of reporting.

Excluding hardware and server expenses, validators need an initial investment of at least $49,000 worth of SOL to cover the first year of operations. On an ongoing basis, validators require around 401 SOL per year to pay voting fees and remain active.

Solana validators must submit a vote transaction for every block they agree on as part of the consensus process. These vote transactions can cost up to 1.1 SOL per day, according to technical documentation from Solana validator client Agave.

For small operators, these costs can quickly outweigh potential rewards, especially when staking fees are pushed toward zero by larger competitors.

The Solana Foundation was contacted for comment but had not responded at the time of publication.