Solflare covers missed staking rewards after Solana validator outage

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Solflare covers staking loss

Highlights

Solflare's validator suffered a security incident with a third-party provider, halting staking rewards for roughly 1.56 million SOL ($160 million) delegated to the affected node.
A new replacement validator is now live, and Solflare will cover missed rewards for users who migrate their stake from 'Solflare (Legacy)' to the new validator.
Validator migration may delay staking rewards due to Solana's two-day epoch cycles, and Solflare is warning users of increased scam risks during this transition.

Validator incident and migration plan

As reported by CoinDesk, Solflare says the company it pays to operate its validator reports "a security incident on their side" affecting the validator keys it holds. The wallet does not name that provider, but says the issue takes its validator offline and halts staking rewards tied to that node.

Solflare operates its own validator so users can stake SOL within the app rather than moving tokens elsewhere. On Wednesday, Stakewiz data shows about 1.56 million SOL remains delegated to the affected validator, an amount worth roughly $160 million based on the article's estimate.

Solflare says a replacement validator is now live and that it will cover missed rewards for users who move their stake to the new validator. Customers can either unstake from "Solflare (Legacy)" and then restake with the new validator, or wait for an app update designed to guide them through the process.

User safeguards and wider staking impact

Solflare says the underlying coins are not at risk because staked SOL remains in each user's own stake account and is controlled by the user's keys. It adds that control of validator keys can stop a validator from earning rewards, but cannot be used to withdraw customer stake.

The migration is not immediate because staking changes on Solana take effect only at the end of each epoch, a cycle of roughly two days. That means the old stake must first wind down before the new validator begins earning, extending the period in which some users could miss rewards.

Solflare also warns that a broad validator migration can create an opening for scammers. The company says the move will take place only inside its app and that it will not contact users directly or send links related to the switch.

In our earlier article on CTOS Digital’s cybersecurity incident, we outlined the company’s estimate that the breach would cut net profit by RM12 million and revenue by RM16 million if some services stayed disrupted until the third week of October. We also noted that each additional week of disruption could further weigh on results, alongside concerns about longer-term customer confidence and higher security-related costs.

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