Marinade Finance reported that 28.83% of staked SOL went offline following a routing failure at infrastructure provider Teraswitch. The disruption brought the Solana network close to the 33.34% threshold at which transaction finalization would be halted, raising concerns about validator concentration risk.

According to WuBlockchain, approximately 90 validators were affected by the incident. Autonomous System AS20326 alone hosted over 118.9 million SOL, underscoring the extent to which staked assets were concentrated within a single infrastructure provider.

Incident Details

The routing failure at Teraswitch caused a significant portion of the network's staked SOL to become unresponsive. Transaction finalization on Solana requires more than two-thirds of staked validators to remain online; the 28.83% outage left little margin before the critical 33.34% threshold would have been crossed.

Traffic recovered approximately 33 minutes after the failure. However, affected validators reportedly lost around 333 SOL in staking rewards during the downtime.

Marinade Finance's Response

Marinade Finance, a liquid staking protocol on Solana, confirmed the outage and stated its intention to review its concentration limits in response to the incident. The protocol has a direct interest in validator performance and network stability, as staked assets under its management are distributed across various infrastructure providers. Liquid staking protocols like Marinade play a significant role in how stake is allocated across validators, meaning their concentration policies can materially influence the network's effective decentralization—a concept often measured by the Nakamoto coefficient, which counts the minimum number of independent entities needed to disrupt consensus.

Background

Solana is a high-performance blockchain platform designed for decentralized applications, known for its high throughput and scalability. The network has experienced multiple partial and full outages in past years, drawing recurring scrutiny to its resilience and infrastructure dependencies. The Teraswitch incident adds to that track record, highlighting ongoing questions about the resilience of validator infrastructure and the risks associated with concentrated hosting arrangements.

Validator concentration is not unique to Solana; proof-of-stake networks generally face pressure to ensure that no single cloud or colocation provider accumulates enough stake to threaten liveness. Whether this near-miss prompts broader operational changes—such as staking protocols adopting tighter per-provider caps or validators migrating to alternative data centers—is likely to be a focal point for infrastructure operators and delegates in the aftermath.

No significant price movement or trading volume change for SOL was reported in connection with the event.