Tezos governance has been very active lately. In June 2024, the Paris upgrade introduced important changes, including a new locked staking model and adaptive issuance that ties rewards to the ratio of staked XTZ.

Just a few months later, on November 24, 2024, another significant governance milestone was achieved with the approval of the Quebec proposal during Proposal Period 135. Quebec is anticipated to go live on Tezos in early 2025.

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A Vote Between Two Proposals

Two proposals were up for consideration:

1. Quebec – Proposed by Nomadic Labs, TriliTech, and Functori, with backing from the Tezos Foundation.
2. Q3NA – A community proposal by Tez Capital.

Both proposals built upon the Paris changes but had no differences in approach besides in the adaptive issuance schedule. Ultimately, Quebec won with 187 million votes to 104 million, with a 33% participation rate among bakers.

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Changes Introduced by Quebec

Lower Block Times

Reducing block times from 10 seconds to 8 seconds will enhance performance and improve UX by offering faster finality.

Increased Delegation Limit

Bakers can now accept delegations up to 9x their stake, up from 5x. This benefits bakers, allowing them to earn higher rewards by accommodating more delegated stake.

Reduction in Voting Power for Delegators

Paris introduced locked staking, incentivizing users to stake rather than delegate their XTZ, and reducing delegated voting power by 50%. Quebec takes this further, reducing the voting weight of delegated XTZ to 33% of staked XTZ.

This adjustment encourages delegators to transition to staking for full voting power and rewards.

If you're currently delegating your XTZ to a Chorus One baker, visit this website to learn how to start staking and maximize your rewards!

Adaptive Issuance

Quebec implements a more aggressive reduction in baking rewards to address sell pressure on XTZ. Under Quebec, if 50% of XTZ is staked, the yield is reduced to 1%, compared to 3% in the Q3NA proposal, as depicted on the graph below.

Some validators and community members raised valid concerns:

• Can the network thrive with a 1% issuance rate if only 50% of XTZ is staked?
• Smaller validators may face challenges as rewards decrease, potentially consolidating stake with larger validators.
• Lower yields might drive some stakers to explore alternative networks with higher returns.

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Supporting Quebec: A Long-Term Vision

While these concerns are noteworthy, the focus remains on the network's long-term health, and the community has clearly shown its preferred choice.

Despite some reservations about the steep reduction in issuance, Chorus One and other supporters voted for Quebec. This decision reflects confidence in the Tezos Foundation’s long-term vision and its alignment with the ecosystem's core contributors.

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Action Required

If you're currently delegating your XTZ to a Chorus One baker, visit our guide to learn how to start staking and maximize your rewards!

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About Chorus One

Chorus One is one of the largest institutional staking providers globally, operating infrastructure for over 60 Proof-of-Stake (PoS) networks, including Ethereum, Cosmos, Solana, Avalanche, Near, and others. Since 2018, we have been at the forefront of the PoS industry, offering easy-to-use, enterprise-grade staking solutions, conducting industry-leading research, and investing in innovative protocols through Chorus One Ventures. As an ISO 27001 certified provider, Chorus One also offers slashing and double-signing insurance to its institutional clients. For more information, visit chorus.one or follow us on LinkedIn, X (formerly Twitter), and Telegram.

TL;DR

• Transaction inclusion is one of the biggest challenges for Solana today.
• We’ve explored how different solutions impact transaction inclusion times:
  • Priority Fees minimally affect landing times.
  • Jito Tips also have negligible latency benefits.
  • swQoS is the most effective at reducing latency for all transaction types.

Introduction

Solana processes thousands of transactions per second, which creates intense competition for transaction inclusion in the limited space of a slot. The high throughput and low block time (~400ms) require transactions to be propagated, prioritized, and included in real-time.

High throughput on Solana comes with another advantage: low transaction costs. Transaction fees have been minimal, at just 0.000005 SOL per signature. While this benefits everyone, it comes with a minor trade-off—it makes spam inexpensive.

For end-users, spam means slower transaction finalization, higher costs, and unreliable performance. It can even halt the network with a DDoS attack, as in 2021, or with an NFT mint, as in 2022.

Against this backdrop, Solana introduced significant updates in 2022: stake-weighted quality of service (swQoS) and priority fees. Both are designed to ensure the network prioritizes higher-value transactions, albeit through different approaches.

Another piece of infrastructure that can help reduce transaction latency is Jito MEV. It enables users to send tips to validators in exchange for ensuring that transaction bundles are prioritized and processed by them.

This article will explore these solutions, break down their features, and assess their effectiveness in transaction landing latency.

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Solana Transaction Anatomy

Let’s start with a basic building block—a transaction.

Solana has two types of transactions: voting and non-voting (regular). Voting transactions achieve consensus, while non-voting transactions change the state of the network's accounts.

Solana transaction consists of several components that define how data is structured and processed on the blockchain¹:

1. Accounts, which represent the state of Solana.
2. Instructions, which define the operations to be executed in the transaction (e.g. transfer SOL, read account state, write account state).
3. Message, which includes:
   • Information on accounts invovled in the transation.
   • The most recent blockhash at the time when the transaction was created.‍
4. Signatures, which cryptographically guarantee the authenticity of the transaction.

A single transaction can have multiple accounts, instructions, and signatures.

Below is an example of a non-voting transaction, including the components mentioned above:

On Solana, a transaction can be initiated by a user or a smart contract (a program). Once initiated, the transaction is sent to an RPC node, which acts as a bridge between users, applications, and the blockchain.

The RPC node forwards the transaction to the current leader—a validator responsible for building the next block. Solana uses a leader schedule, where validators take turns proposing blocks. During their turn, the leader collects transactions and produces four consecutive blocks before passing the role to the next validator.

Validators and RPC nodes are two types of nodes on Solana. Validators actively participate in consensus by voting, while RPC nodes do not. Aside from this, their structure is effectively the same.

So, why are RPCs needed? They offload non-consensus tasks from validators, allowing validators to focus on voting. Meanwhile, RPC nodes handle interactions with applications and wallets, such as fetching balances, submitting transactions, and providing blockchain data.

The main difference is that validators are staked, securing the network, while RPC nodes are not.

After reaching the validator, the transactions are processed in a few stages, which include²³:

1. Fetch, where the validator parses incoming packets for valid transactions.
2. Verification, where the transaction signatures are verified.
3. Banking, the core stage of the entire pipeline, where:
   • Accounts are locked to ensure no conflicting transactions execute simultaneously.
   • The transaction is executed in SVM, which processes program instructions and updates account states.
   • The results of the transaction (success or failure) are validated.
   • Transactions are processed in parallel in two voting and four non-voting threads using Solana's runtime.
   • Based on the leader schedule, a validator handles transactions as follows:
     • Process, if it is the leader.
     • Hold if it is two slots away from being the leader.
     • Forward to the current leader and next two leaders if more than two slots away.‍
4. Proof of History, where transaction data and previous hash are hashed to determine the transaction ordering.‍
5. Broadcast, where valid transactions are shared with the networks in groups called shreds.

The transaction is considered confirmed if it is voted for by ⅔ of the total network stake. It is finalized after 31 blocks.

In this setup, all validators and RPC nodes compete for the same limited bandwidth to send transactions to leaders. This creates inefficiencies, as any node can overwhelm the leader by spamming more transactions than the leader can handle.

To improve network resilience and enhance user experience, Solana introduced QUIC, swQoS, and priority fees, as outlined in this December 2022 post:

• QUIC Protocol: The QUIC protocol transfers data between two network nodes. It enables parallelization of data streams and requires establishing a connection between validators and RPC nodes.‍
• Stake-weighted Quality of Service: swQoS is a mechanism that prioritizes network traffic based on the stake held by validators. It ensures that validators with more stake can send more transactions to the leader.‍
• Priority Fees: In addition to the base fee of 5K lamports per signature, users can include an additional priority fee, to speed up the inclusion of their transactions.

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Stake-weighted QoS⁴

With the adoption of the QUIC protocol, trusted connections between nodes are required to send transactions. The swQoS system prioritizes these connections based on stake. In this framework, non-staked RPC nodes have limited opportunities to send transactions directly to the leader. Instead, they primarily rely on staked validators to forward their transactions.

Technically, a validator must configure swQoS individually for each RPC node, establishing a trusted peer relationship. When this service is enabled, any packets the RPC node sends are treated as though they originate from the validator configuring swQoS.

Validators are allocated a portion of the leader’s bandwidth proportional to their stake. For example, a validator holding 1% of the total stake can send up to 1% of the transaction packets during each leader’s slot.

From the leader’s perspective, 80% of available connections are reserved for staked nodes, while the remaining 20% are allocated to RPC nodes. To qualify as a staked node, a validator must maintain a minimum stake of 15,000 SOL.

While swQoS does not guarantee immediate inclusion of all transactions, it significantly increases the likelihood of inclusion for transactions submitted through nodes connected to high-stake validators.

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Priority Fees

Priority fees serve the same role as swQoS by increasing the chances of transaction inclusion, though they use a completely different mechanism.

There are two types of fees on Solana⁵:

• Base Fee: This is a fixed 5,000 lamports (0.000005 SOL) per signature, typically one per transaction. It does not depend on the compute units (CUs) required to process the transaction.
• Priority Fee: This fee is optional and specified by users for each transaction. It depends on the CUs requested by the transaction. CUs are used to estimate the computational cost, similar to gas on Ethereum.

Of the total fees from a transaction, 50% is burned, while 50% is received by the leader processing the transaction. A proposal to award the validator 100% of the priority fee has been passed and is expected to be activated in 2025 (see SIMD-0096).

Priority fees help validators prioritize transactions, particularly during high congestion periods when many transactions compete for the leader's bandwidth. Since fees are collected before transactions are executed, even failed transactions pay them.

During the banking stage of Solana’s transaction processing, transactions are non-deterministically assigned to queues within different execution threads. Within each queue, transactions are ranked by their priority fee and arrival time⁶. While a higher priority fee doesn’t guarantee that a transaction will be executed first, it does increase its chances.

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Jito MEV

The final puzzle of transaction prioritization is Jito. This modified Solana client allows searchers to send tips to validators in exchange for including groups of transactions, known as bundles, in the next block.

It could be argued that the Jito infrastructure prioritizes transactions using a tipping mechanism, as users can send a single transaction with a tip to improve its chances of landing fast.

For a deeper explanation of how Jito works, check out our previous article on the Paladin bot, which provides more details.

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swQoS, Priority Fees, and Jito Tips in Action

We now have a clearer understanding of how all three solutions contribute to transaction inclusion and prioritization. But how do they affect latency? Let’s find out.

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Methodology

To calculate the time to inclusion of a transaction, we measure the difference between the time it is included in a block and the time it is generated. On Solana, the generation time can be determined from the timestamp of the transaction’s recent blockhash. Transactions with a recent blockhash older than 150 slots—approximately 90 seconds—expire.

The latest blockhash is assigned to the transaction before it is signed, so transactions signed by bots will be included faster than transactions generated by normal users. This method is not perfect, but still allows us to collect valuable information about latency and user topology.

Other factors beyond the swQoS and priority fees, such as the geographical proximity of nodes to the leader or validator and RPC performance, also impact inclusion times—we are not fully accounting for those.

To reduce the possible biases, we consider only slots proposed by our main identity from November 18th to November 25th, 2024.

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Time to Inclusion

The time to inclusion across all transactions, without any filtering, has a trimodal distribution suggesting at least three transaction types. The highest peak is at 63 seconds, followed by another at 17 seconds, and a smaller one is at 5 seconds.

The second and third peaks are likely from regular users. This double peak could occur because general users don't set maxRetries to zero when generating the transaction. The first peak, at around 5s, is probably related to bots, where the delay between generating and signing a transaction is marginally zero.

We can classify users based on their 95th percentile time to inclusion:

• Fast: Less than 10 seconds.
• Normal: Between 10 and 40 seconds.
• Slow: Greater than 40 seconds.

Most users fall into the “normal” and “slow” classifications. Only a small fraction of submitted transactions originate from “fast” users.

Let’s now break down transactions by source.

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Priority Fee

Transactions can be categorized based on their priority fee (PF) with respect to the PF distribution in the corresponding slot. Precisely, we can compare the PF with the 95th percentile (95p) of the distribution:

• Cheap: PF is less than 10% of the 95p PF within the block.
• Normal: PF is between 10% and 50% of the 95p PF within the block.
• Expensive: PF is greater than 50% of the 95p PF within the block.

The size of the priority fee generally doesn’t influence a transaction’s time to inclusion. There isn’t a clear threshold where transactions with higher PF are consistently included more quickly. The result remains stable even when accounting for PF per compute unit.

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Jito Tippers

We can restrict the analysis to users sending transactions via the Jito MEV infrastructure, excluding addresses of known swQoS consumers. Interestingly, most Jito transactions originate from “slow” users.

We categorize tippers by siże of tips in the block, analogously to what we did for PF:

• Cheap: Tip is less than 10% of 95p in the block.
• Normal: Tip is between 10% and 50% of 95p in the block.
• Expensive: Tip exceeds 50% of 95p in the block.

When we compute the probability density function (PDF) of time to inclusion based on this classification, we find that the tip size doesn’t significantly impact the time to inclusion, suggesting that to build a successful MEV bot, one doesn’t have to pay more in tips!

Within the Jito framework, a bundle can consist of:

• A single transaction that includes the user operations along with the Jito tip (e.g. here).
• Separate transactions, where one of them is a payment to the Jito program (e.g. here).

In both cases, the time it takes for the entire bundle to be included is determined by the inclusion time of the tip transaction. However, when a tip is paid in a separate transaction, we don’t track the other leg. This reduction in volume explains why the PDF of tippers differs from that of Jito consumers.

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swQoS

It’s impossible to fully disentangle transaction time to inclusion from swQoS for general users, meaning some transactions in the analysis may still utilize swQoS. However, we can classify users based on addresses associated with our swQoS clients.

When we do this and apply the defined user topology classification, it becomes clear that swQoS consumers experience significantly reduced times to inclusion.

The peak around 60 seconds is much smaller for swQoS consumers, indicating they are far less likely to face such high inclusion times

The highest impact of using swQoS is seen in the reduction of the time to inclusion for “slow” users. By computing the cumulative distribution function (CDF) for this time, we observe a 30% probability of these transactions being included in less than 13 seconds.

When comparing the corresponding CDFs:

• For Jito, “slow” users have only a 10% probability of being included in less than 13 seconds and 60% in less than 50 seconds.
• For swQoS, “slow” users have 25% of probability of inclusion within 13 seconds and 86% in 50 seconds.

'Normal' users also benefit from swQoS. There's an additional peak in the PDF for these users between 9s and 13s, showing that some of “normal” users process transactions in less than 20s. Additionally, another peak appears around 40s, indicating that part of the slower users now see their 95th percentile falling in the left tail end of 'normal' users. This suggests that the overall spread of the time-to-inclusion distribution is reduced.

There is no statistically significant difference between the analyzed samples for “fast” users. However, some Jito consumers may also use swQoS, which complicates the ability to draw definitive conclusions.

Despite this, the improvements for “slow” and “norma”' users highlights swQoS's positive impact on transaction inclusion times. If swQoS explains the PDF shape for “fast” users, it increases the likelihood of inclusion within 10s from ~30% to ~100%, a 3x improvement. A similar 3x improvement is observed for “slow” users being included within 13s.

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Summary

Transaction inclusion is arguably Solana's most pressing challenge today. Efforts to address this have been made at the core protocol level with swQoS and priority fees and through third-party solutions like Jito (remembering that the main Jito use is MEV).

Solana’s latest motto is to increase throughput and reduce latency. In this article, we have examined how these three solutions improve landing time. Or, more simply, do they actually reduce latency? We found out that:

• swQoS delivers the highest latency reductions. This is evident for all types of transactions, but, especially for “slow”. For "fast" transactions, swQoS and Jito have similar performance, though comparing them can be tricky as overlapping use is hard to detect.
• Priority fees, while helpful for transaction inclusion, have a minuscule effect on landing times.
• Jito tips’ impact on latency is insignificant, especially for slow transactions.

Among the three, swQoS is the most reliable for reducing latency. Jito and priority fees can be used when the time to inclusion is less important.

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References:

1. Solana documentation: transactions
2. Solana documentation: TPU
3. Helius, Stake-weighted Quality of Service, Everything You Need to Know
4. Solana documentation: swQoS
5. Solana documentation: fees
6. Umbra Research, Lifecyle of a Solana Transaction

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About Chorus One

Chorus One is one of the largest institutional staking providers globally, operating infrastructure for over 60 Proof-of-Stake (PoS) networks, including Ethereum, Cosmos, Solana, Avalanche, Near, and others. Since 2018, we have been at the forefront of the PoS industry, offering easy-to-use, enterprise-grade staking solutions, conducting industry-leading research, and investing in innovative protocols through Chorus One Ventures. As an ISO 27001 certified provider, Chorus One also offers slashing and double-signing insurance to its institutional clients. For more information, visit chorus.one or follow us on LinkedIn, X (formerly Twitter), and Telegram.

Key Details

Chorus One Validator: tnam1qxsx2ezu89gx252kwwluqp7hadyp285tkczhaqg0or search for Chorus One on the Namada Staking page.

Recommended Wallet: Namada Keychain (Chrome or Firefox only)

Block Explorer: https://namada.info/

Unstaking Period: 14 days

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About Namada

Namada (NAM) is a proof of stake (PoS) layer-1 blockchain from the Anoma foundation designed to prioritize privacy in multi-asset transactions using zero-knowledge proof technology and focusing on interchain asset-agnostic data protection.

• What is Namada?
• Introducing Namada: Multichain Asset-Agnostic Data Protection

Built on the Tendermint consensus engine, it uses a mechanism called Zcash Sapling Protocol to enable shielded transfers, allowing users to transact privately while supporting interoperability with other blockchains.

Namada stands out for its native multi-asset support, meaning any asset from connected chains or created within Namada can benefit from its privacy features without needing custom contracts.

The platform also introduces an innovative feature called Privacy as a Public Good. It rewards users for using private transactions by allocating a portion of transaction fees and staking rewards to fund privacy-centric initiatives.

Namada aims to enhance privacy across the blockchain ecosystem, offering a solution that seamlessly integrates privacy with usability, making it accessible for both developers and end-users.

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How to stake NAM

1. Install the Namada Keychain browser extension

To begin, you will need to Namada Keychain, which can be downloaded here:

• https://namada.net/keychain

Please note that currently the Namada Keychain is only supported on Chrome and Firefox.

If you already have the Namada Keychain installed, skip ahead to: How to stake

Example of the Namada Keychain webpage.

Next, set up your wallet by either creating a new wallet via a 12 or 24-word phrase from the Namada Keychain, or connect via Ledger which will require having already installed the Namada app from Ledger Live.

• See: Ledger's guide on installing the Namada app

If you are creating a new wallet from the Namada Keychain directly, please be sure to store your 12 or 24-word phrase securely.

You will be prompted to enter some random words from your seed phrase to ensure you wrote it down correctly. Next, you will be prompted to set a password for your Namada Keychain.

Your seed phrase cannot be recovered if lost. Please be sure to write this down somewhere secure and never share it with anyone.

Anyone with access to your seed phrase will have access to your funds.

• It is not advisable to store this digitally or as a screenshot.

2. How to stake

Next, navigate to https://interface.namada.tududes.com/ to view the overview interface for Namada.

• You can either click on the blue 'Stake' button in the bottom-center of the screen or click on the Staking tab on the left hand panel of the screen.  

Example of the Namada overview interface.

You can search for Chorus One in the search bar or enter the Chorus One validator address to find the correct validator from the Staking interface.

• tnam1qxsx2ezu89gx252kwwluqp7hadyp285tkczhaqg0

Simply click on 'Stake' and you will be brought to the staking page.

Example of the Namada staking interface.

You may need to search for Chorus One again to find it from the list of available validators.

Example of staking 50 NAM to Chorus One.

Simply enter how much NAM you wish to stake with Chorus One and then complete the transaction in your Namada Keychain and sign the transaction.

You will be prompted to enter the password you set for your Namada Keychain wallet to finalize the transaction.

Once you have approved the transaction, you have successfully staked your NAM!

3. Increasing and managing your NAM stake

If you'd like to increase or manage your NAM stake, you can do so from the Namada Overview page or the Namada Staking page.

Enter the amount of NAM you would like to increase your stake by.

Follow the same steps as before to approve and finalize your staking transaction.

4. Unstaking your NAM

If you wish to unstake your NAM, this can be done from the Namada Staking page which will provide an overview of your staked balances and which validators you have delegated to.

Below is an example of how it may look for you.

• You will see the options to Stake, Redelegate, or Unstake.

Example of the Namada Staking interface.

To unstake, simply click on the 'Unstake' button and follow the prompts to approve and finalize the transaction, similar to the steps taken to stake your NAM originally.

When unstaking your NAM, please note that it will take 14 days to complete during which time your staked balance will not be earning staking rewards.

After this period has passed, your NAM will become liquid again and you can transact with it.

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A Note to Institutional Investors

If you are an institutional investor looking to stake Namada (NAM) with Chorus One, please reach out to us via our staking request form.

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About Chorus One

Chorus One is one of the largest institutional staking providers globally, operating infrastructure for over 60 Proof-of-Stake (PoS) networks, including Ethereum, Cosmos, Solana, Avalanche, Near, and others. Since 2018, we have been at the forefront of the PoS industry, offering easy-to-use, enterprise-grade staking solutions, conducting industry-leading research, and investing in innovative protocols through Chorus One Ventures. As an ISO 27001 certified provider, Chorus One also offers slashing and double-signing insurance to its institutional clients. For more information, visit chorus.one or follow us on LinkedIn, X (formerly Twitter), and Telegram.

Chorus One is excited to announce our partnership with Fragmetric, a leading liquid restaking protocol on Solana.

Restaking, one of the most significant innovations in the crypto space in recent years, is now arriving on Solana through Jito Restaking. This platform will leverage Solana native assets to support Node Consensus Networks (NCNs), applications that deliver services to Solana users.

While progress in liquid restaking has been impressive, the space still faces challenges that slow down its growth:

• Ensuring fair allocation of rewards among participants.
• Determining proportional penalties for LSTs in the event of slashing.

Fragmetric solves these issues with $fragSOL, an innovative liquid restaking token (LRT) powered by Solana's unique features:

• Leveraging Solana’s token extension and transfer hook functionalities to enable time-based reward tracking for LRT holders.
• Using the Normalized Token Program to pool LSTs into a unified economic framework, ensuring slashing events are fair.

Stay tuned as Chorus One shapes the future of restaking with Fragmetric and $fragSOL!

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About Fragmetric

Fragmetric is a native liquid restaking protocol on Solana, with a vision of enhancing the Solana ecosystem's security and economic potential. Through implementing advantage of Solana's token extension, Fragmetric has effectively implemented NCN reward distribution. Furthermore, Fragmetric designed practical solutions, the Normalized Token Program for leveraging various LSTs in restaking platforms. Fragmetric’s mission is to build a secure, transparent, and highly efficient restaking infrastructure that empowers users and supports the stability of the Solana's restaking ecosystem.

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About Chorus One

Chorus One is one of the largest institutional staking providers globally, operating infrastructure for over 60 Proof-of-Stake (PoS) networks, including Ethereum, Cosmos, Solana, Avalanche, Near, and others. Since 2018, we have been at the forefront of the PoS industry, offering easy-to-use, enterprise-grade staking solutions, conducting industry-leading research, and investing in innovative protocols through Chorus One Ventures. As an ISO 27001 certified provider, Chorus One also offers slashing and double-signing insurance to its institutional clients. For more information, visit chorus.one or follow us on LinkedIn, X (formerly Twitter), and Telegram.