SIMD-0123: Block Revenue Distribution
What’s up with Solana SIMD-0123?
Block rewards, MEV, and other additional sources of yield cannot be easily distributed to stakers. This is due technical limitations with the current Solana Stake program. Every validator would have loop through their stakers, calculate the pro-rated rewards, and transfer them. For every epoch. Which makes it not feasible to handle this problem in the native protocol (…yet).
If you look at the following validator profit calculator, you can see that a validator with 200,000 SOL staked is making about $1,000,000/yr from block rewards. And that’s not going to stakers!
Some staking providers are solving this problem in their own way. Jito has built complex systems on and off chain to take snapshots of the blockchain, analyze all the stakers under a validator, calculated MEV tips accumulated for the epoch, and then send all of the transactions required to transfer those tips out. Others use an LST or NFTs and transfer some rewards to the stake pool, which gets distributed via a single transfer.
With SIMD-0123 Stakers can get that money! Validators would be able to set a commission rate and distribute the remaining block rewards, mev, and other external sources to stakers with minimal additional over head.
