In August 2022, Solana, one of the most active proof-of-stake (PoS) blockchains, hit a major milestone: over 300 million SOL staked across the network. This marks a continued rise in user and institutional participation in the Solana ecosystem, driven by attractive APYs, developer momentum, and support from major staking platforms.

However, the network’s technical challenges are once again under the spotlight. Frequent network outages and congestion during the same period have raised alarms among validators, who are now calling for urgent improvements to client performance and overall network reliability.

Solana’s Staking Momentum Grows Despite Market Conditions

Even amid crypto market uncertainty in mid-2022, Solana has shown remarkable staking resilience. According to OnStaking’s August report, the total number of SOL staked surged past 300 million, representing over 75% of the total circulating supply.

This staking milestone reflects strong confidence in the network’s long-term prospects, especially from retail users and staking-as-a-service providers like Figment, Chorus One, and Everstake.

Factors driving staking growth include:

• Attractive APYs averaging between 5.5%–6.8%

• Low transaction fees, ideal for high-volume applications

• Active developer ecosystem building on top of Solana

Validator Community Voices Concerns Over Network Stability

Despite the staking growth, validators are becoming increasingly vocal about Solana’s persistent technical fragility. In August alone, the network experienced three partial outages, with slow block propagation and delayed finality. These disruptions not only affect users but also compromise staking rewards and validator performance.

A validator from Europe, quoted in the report, stated:

“The economic incentives are strong, but the technical bottlenecks are frustrating. We need a more stable validator client or we risk long-term credibility.”

Calls for Client Optimization and Performance Upgrades

Much of the performance concern centers around Solana’s validator client, which requires constant updates to handle the blockchain’s high throughput model. Unlike Ethereum, Solana operates with a single global state and fast block times, which puts immense pressure on hardware and bandwidth.

Key community demands include:

• Reduced memory overhead in the validator client

• Improved synchronization algorithms

• Automated failover mechanisms during outages

• Regular benchmarking and optimization schedules

Developers from Solana Labs have acknowledged these issues and promised further updates to improve resilience ahead of future protocol upgrades like Firedancer, a new high-performance validator client expected in 2023.

Impact on Staking Rewards and Network Trust

Frequent network issues have caused short-term drops in staking APY due to missed slots and penalties. While the long-term yield remains attractive, inconsistent uptime has made some delegators hesitant.

Some users have started diversifying their staking across different chains, including Avalanche, Cosmos, and Polkadot, which have reported better uptime consistency in Q3 2022.

Still, Solana retains its lead in developer activity, NFT ecosystem strength, and total value locked (TVL) in DeFi protocols, which helps keep staking demand robust.

Decentralization Progress and Validator Set Growth

Despite the performance issues, Solana continues to make strides in decentralization. In August 2022, the number of active validators exceeded 2,000, with significant geographic and hardware diversity.

This expansion of the validator set is critical to long-term network security. OnStaking’s report highlights that the top 20 validators no longer control more than 33% of the stake, a positive sign for censorship resistance and governance distribution.

Ecosystem Response: From Governance to Incentives

The Solana Foundation has begun hosting validator roundtables and working groups to address reliability challenges. Proposals on the table include:

• Staking slashing reform for misbehaving nodes

• Incentives for client optimization contributions

• Subsidies for hardware upgrades to reduce entry barriers

Meanwhile, developers are working on SVM-based sidechains and layer-2 solutions to offload activity from the mainnet during congestion peaks.

Market Outlook: Staking Growth Faces Technical Hurdles

As staking volume surpasses 300 million SOL, Solana's future hinges on solving its core performance limitations. For now, validators are committed, users remain engaged, and institutional interest is still alive—but cracks in the infrastructure must be addressed.

The report concludes that if Solana can stabilize its base layer, the staking economy has the potential to surpass 350 million SOL by early 2023.