Solana’s 8% Staking Yield: VC Drops Bombshell—‘Is This Just a Crypto Meme?’

Solana’s staking rewards hit 8%—but one venture capitalist calls it ‘performance art for degens.’

High yields or high hopium? The blockchain’s APY outpaces TradFi, but skeptics whisper ‘ponzinomics.’

VCs can’t decide: genius tokenomics or a liquidity mirage. Meanwhile, retail stacks SOL like it’s 2021.

Closing thought: If ‘number go up’ is the thesis, maybe Wall Street was right about crypto all along.

The problem with staking: Inflation

But here’s the problem — staking is dominated by 12 validator firms across all the proof-of-stake (PoS) chains like Solana, Aptos [APT], ethereum [ETH], and more.

According to Qureshi, only Ethereum is better off in terms of security because it has home stakers. 

As a result, the current security model is heavily concentrated within select validator firms. This centralization risk doesn’t align with the ‘network security’ ethos of staking. 

 He went on and added, 

“The security model is not what we pretended it was 6 years ago. As a result, it’s rational if we fix this problem.”  

Additionally, he viewed staking rewards as inflation and taxation that dilute other holders who don’t stake.

He added that now U.S. spot ETF issuers are pushing for yield to avoid being diluted, and not necessarily to secure the network. 

“The things that make L1s secure are not inflation rates. It’s the robustness of the software, and who the validators are.”

Solana co-founder Anatoly Yakovenko agreed with Qureshi’s stance. 

Notably, Solana’s inflation rate is currently fixed at 5% per year, and is closely tied to the rewards issued to validators. However, it adds more supply and exposes SOL to devaluation or dilution. 

Source: solana Rewards

In fact, the community’s attempt to cut the inflation rate by 80% earlier in the year was voted down by key validators. 

Now, some community members have voiced concerns about imbalance and hefty profit maximization by validators, leaving applications offering the staking services fighting for breadcrumbs. 

In Q4 2024, validator operator revenue hit a record high of $300 million while overall staker revenue across the Solana ecosystem hit a high of $1.59B.

In Q1 2025, staker revenue reached $1.54B, underscoring strong staking demand during the bull run. 

Source: Blockworks

It remains to be seen how Solana will resolve its inflation and whether the PoS system will heed to Qureshi’s call.