Solflare to Cover Missed Staking Rewards After Solana Validator Outage Hits $160M

Solflare has pledged to compensate users for staking rewards lost after an external service provider experienced a security incident that took its Solana validator offline. Approximately 1.56 million SOL, worth around $160 million, remained delegated to the inactive validator.

Solflare, a wallet application built for the Solana blockchain, said it would reimburse affected users for the rewards they missed while the validator was unable to operate.

Staking enables SOL holders to earn rewards by delegating their tokens to validators. These computers help verify transactions and maintain Solana’s blockchain records. In return, delegators receive a portion of the staking rewards as long as their chosen validator remains operational. Solflare operates a validator that allows users to stake SOL directly through its app.

On Tuesday evening in the United States, Solflare disclosed that the external company responsible for operating its validator had reported a security incident involving the keys it controlled for the validator.

The wallet provider did not reveal the identity of the company. According to Stakewiz data, the validator had stopped generating rewards, while approximately 1.56 million SOL remained delegated to it as of Wednesday afternoon.

However, users’ deposited assets were not at risk, according to Solflare. The company explained that staked SOL remains in an individual stake account controlled by the user’s private keys, adding that no customer funds had been affected.

Although access to a validator’s keys can disrupt its operations and prevent it from earning rewards, those keys do not allow the operator to withdraw users’ delegated stake.

The immediate impact for affected users is the temporary loss of staking income. The incident also revealed that the validator, despite carrying Solflare’s branding, had actually been operated by a third-party company.

On Wednesday, Solflare announced that a replacement validator was operational and confirmed that it would cover missed rewards for users who transferred their stake to the new validator.

Users can initiate the migration by selecting the standard unstaking option for “Solflare (Legacy)” before delegating their SOL to the replacement validator. Alternatively, they can wait for an upcoming app update designed to guide them through the process.

The transition will not happen immediately. Solana stake changes take effect at the end of an epoch, a period lasting roughly two days. As a result, users must wait for their existing stake to become inactive before the new validator begins generating rewards.

Solflare also warned users to remain alert for potential scams during the migration. The company emphasized that the process will take place entirely within its official app and that it will never contact users directly or send them external links to facilitate the switch.