Quants are paying $4,000 a month to front-run Solana trades

According to a new investigation, validators are accepting payments starting at 10 SOL ($1,000) a month to leak early access to Solana trades they receive for block production.

Maximal extractable value (MEV) is allegedly on sale to quants via an incredibly valuable, realtime feed of pre-execution transactions.

Corvus Labs’ Andrei Vacariu traced payouts through a vault where Everstake, led by former Grayscale founding general manager David Kinitsky, sells a $4,000/month private data feed of pending trades.

He also claimed that Everstake salespeople are soliciting more validator node operators to join the scheme with offers of over 10 SOL a month.

With this valuable information, sophisticated traders can allegedly front-run and sandwich-attack common orders on DeFi exchanges.

‘Every trader on Solana’

Vacariu spelled out the implications of his allegation for average users of Solana applications: “Every trader on Solana hits these slots, can’t tell which leaders mirror their traffic, and can’t opt out.”

Everstake, which runs one of Solana’s larger validators, with about 7.4 million SOL delegated to it, claims that it uses “filtering mechanisms specifically to prevent this type of activity,” and that it doesn’t encourage front-running or sandwiching.

Thanks to this largesse, Everstake’s traffic priority enjoys institutional “stake-weighted quality of service,” a service tier that it repackages via Blockspace.

No public mempool, just high-priced, private mempools

Blockspace’s high-priced service only exists in the first place because Solana has no public mempool.

Unlike common memory pools of pending transactions that are free and easy to access on other blockchains, most Solana transactions travel straight to the validator scheduled to build the next block without queueing in any public mempool. 

That design was supposed to be net positive. Only the scheduled validator would see a trade before it executed, which should minimize MEV.

However, MEV opportunities haven’t disappeared under this model. Instead, they’ve consolidated into a high society of customers who can afford to pay thousands of dollars for slices of MEV opportunities directly from validators with over 15,000 SOL staked on Solana’s blockchain.

Customers can run Everstake’s software, mirroring incoming traffic to Everstake servers before a block exists and rushing through new transactions earlier (or right after) retail orders.

Read more: Solana validator decentralization under scrutiny

Solana validators on the payroll

Everstake isn’t a single validator but rather an association of 39 validators who collectively have staked more than 50 million SOL.

Payouts from Blockspace’s revenue-sharing wallet, according to Vacariu, have disbursed to Prostaking, RockawayX, Staking Facilities, and Stake.org.

Staking Facilities allegedly took more than 950 SOL in such payments since July, while Prostaking allegedly collected over 200.

Other major players in the Solana ecosystem, Blockspace noted, run MEV infrastructure through different architectures.

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