Economics of becoming a Validator

Hi all,

I’m very new here. I am considering the economics of becoming a Validator and would like to know approximately how many SOL a Validator earns per month with a system based around a Threadripper 2970WX (24 cores), or 3960X (newer 24 core model) with 256-512 GB ram.

Thanks in advance.

DP

p.s.
Looking at this link (Summary of Validator Compensation Programs) it looks like that I am too late to become a qualified Validator, still any information of the economics outside this program would be welcome.

I have this exact question and have been unable to find the answer. Also how many stages will there be / how long will compensation last.

thanks

Flappy

I run a validator on mainnet-beta. My system only has 64 GB of RAM but it has been perfectly sufficient thus far. More is always better of course, especially for future proofing.

My CPU is a 3960X. It has been easily sufficient for running a validator.

I run in a datacenter with a dedicated 1 Gbps connection. The network is basically saturated by Solana.

The disk load is extreme. My NVME SSD with 1200 TB write endurance will exceed its rated lifetime in about 6 months. I will be exploring other options, including possibly adding much more RAM and a significant ramdisk to reduce IOPs to the SSD, or possibly just adding 3 more SSDs and splitting the load up between them.

The major factor in determining what the return for a validator would be is stake. You need stake, the more of it the better. I do not know what the actual cost of your hardware and network will be, so I can’t say what your break even point would be, but I think that for most people it would be somewhere in the 20,000 - 40,000 staked SOL range. That’s break even though, and doesn’t count the value of your time spent setting up and maintaining the validator.

The Solana Foundation has a program where they stake validators with a generous amount (enough to make tens of thousands of dollars per year at current economic conditions) but this is only available to non-US citizens. And they are currently not accepting new entrants as far as I know, but you can check forums and discord to find out more specific details on that. They may offer this again in future so watch out for it (if you are eligible).

It costs about 0.8 - 1 SOL per day in transaction fees for a validator to vote. If you have enough stake you will make that back and more. If you have quite a lot of stake (500,000+) then you will get enough leader slots to generate enough blocks to compensate for that in transaction fees you earn on blocks you validator makes.

So here are a few very rough examples:

Validator staked with 6,000 SOL:
-0.9 SOL per day in vote fees
+0.2 SOL per day in vote rewards
+Negligible SOL per day in transaction fee rewards
Net loss of 0.7 SOL per day

Validator staked with 250,000 SOL:
-0.9 SOL per day in vote fees
+6.8 SOL per day in vote rewards
+Negligeable SOL per day in transaction fee rewards
Net gain of 5.9 SOL per day

Validator staked with 2.5 million SOL:
-0.9 SOL per day in vote fees
+68 SOL per day in vote rewards
+1.5 SOL per day in transaction fee rewards
Net gain of 68.6 SOL per day

All of the above math assumes that your validator takes 10% commission. If you are trying to entice others to stake with you, you are unlikely to succeed with such high commission though. Probably you’d have to cut it to 5% or so and then the earnings would be half the above …

2 Likes

Brilliant,

Thank you very much for such a fulsome and informative answer. It’s important to know all this stuff before one rushes out to buy mining equipment.

Still, I think it’s worth a play as a validator for like a month on a spare computer at home and see how it goes. It will give me real data to work with.