Solana’s new fee structure may lead to “gas Wars” for large NFT drops but it will not cause fees to increase across the entire network as on Ethereum.
Solana will soon introduce a new fee prioritization system. This is intended to reduce the impact of high-demand apps and services, as well as other tech upgrades. Anatoly Yakovenko, co-founder of Solana, claims that the fee prioritization model will not penalize users with high fees throughout the entire network, unlike Ethereum.
Solana Labs provided the first details about the new fee implementation in last month. This was after the network crashed that was blamed on bots (or users’ automated programs) overpowering an NFT min. According to the report, the new model will use a “neighborhood fee” approach that doesn’t impact the wider network.
Yakovenko posted a Twitter thread Wednesday night explaining the new fee prioritization method, which was implemented following the rollout of the Solana network update v1.10.25. In an interview with Decrypt, shared his perspective on how the upgrade could help stabilize the network.
Yakovenko used an analogy to explain that there is “one light switch” which “everyone wants at the same moment.” The transaction will be pushed to front of the queue if the transaction has been applied to a Blockchain network with validators acting within their own self-interest.
These gas fees can be extremely expensive on Ethereum. This is evident in the Recent Otherside virtual land drops by the Bored Ape Yacht Club. Even worse, one hot NFT launch or token drop can have a significant impact on the entire Ethereum network, making each transaction more costly.
Yakovenko says that this is not true for Solana’s latest model. In his analogy, each decentralized app (dapp), works as one switch. He wrote that a specific NFT auction, a specific Serum marketplace, or Orca pool are all one switch. These fees are used to prioritize transactions within an app or protocol and not across the entire network.
Surging fees for an app shouldn’t have any effect on the Solana network. Collectors who attempt to secure NFTs in an “in-demand” mint or launch will be charged higher fees. This could lead to the same kind of “gas wars”, which some collectors experienced on Ethereum. However, people transacting on the Solana network shouldn’t feel any fee impact.
Yakovenko told Decrypt today that Solana’s architecture allows that capability. It can identify which network state it is interacting with, so it can choose certain accounts to write to. An NFT launch using Metaplex’s Candy Machine min contract would then be one account among many that may be active on Solana.
Network validators will have the ability to add transactions to a specific writable account within each block. This number can be prioritized according to user fees. Yakovenko stated that they would have “plenty” of resources to add transactions from other accounts on the network, without any impact on fees for a particular app or service.
He said Decrypt that he wanted to see the buckets filled in ascending order of highest-paid bucket. But then, as soon as one bucket is full, all are filled.”
Solana’s transaction fee base is small, usually a fraction of one penny of SOL. Users may be charged an additional fee under the new model. Yakovenko stated that this will be determined by the user and based on the number of compute units required to complete the transaction’s instructions.
What additional fees will users be required to pay? This is currently unknown. Solana Labs representatives said that it was impossible to give an estimate because the demand is driven. It remains to be seen if fees will end up being more expensive than Solana’s base or other networks, but the demand for certain apps shouldn’t have an impact on everyone using the network at any given time.
The Solana mainnet beta version 1.10.25 network update includes the fee prioritization algorithm. It’s not the only technological innovation. The entire set was created to stabilize the Solana network after three periods of notable downtime since last autumn.
Yakovenko said that QUIC, a Google protocol, is another key piece to the puzzle. It will replace Solana’s “raw UDP” protocol (user datagram protocol). QUIC also includes flow control capabilities that allow you to force bots or senders to slow down and back off, he said.
This is key to maintaining the network’s integrity and functioning as it was on April 30. To try and game the Solana NFT launch, bots sent many million transactions per second in an attempt to crowd out legitimate users. Yakovenko stated that it reached 100 gigabits per second and overwhelmed the validators’ devices.
Yakovenko stated that the rate of traffic was so high that it could overwhelm the network. This would also stress test areas of the system that have never seen such high volumes of traffic.
QUIC “basically throttles bots at the source”, he said, effectively reducing the demand of these demanding actors. Metaplex had previously implemented a “bot tax” which was specific to NFT miners using its Candy Machine protocol. However, QUIC’s effect should be felt more broadly across the Solana network.
Stability in sight?
QUIC, the fee prioritization and the fee prioritization models are two additional features. The stake-weighted Quality of Service is a feature that measures the stake (or amount) held within the network by any Solana client. A node that holds 0.5% should be able send 0.5% data packets to the lead validator when there is congestion.
This is another element that helps to prevent network congestion from bots and other malicious sources. Yakovenko stated that unstaked connections “will get dropped faster than staked ones”, while staked connections will be throttled so they don’t block other staked users from joining the network.
The technological updates in v1.10.25 are intended to be a one-two, three punch to improve Solana’s network stability. Solana was down for four hours on June 1, due to a bug. This follows the seven-hour downtime in March and the 17-hour halt September due to heavy traffic from a deFi token launch.
Yakovenko stated that validators are in the process to adopt the update. Once 95% has updated, validators will be able to start “switching off the features”. He said that it could take some more iterations and it could be several weeks before users start to see the additional fees.