Solana’s Fee Model Poised to Outpace Ethereum in Decentralization
Justin Bons, founder and CIO of Cyber Capital, argues that Solana will become the most decentralized blockchain by relying on fee-funded security. In an August 30 Twitter thread, he outlines an economic model where high transaction fees on layer-1 networks finance validator rewards and support broader participation. Bons claims Solana’s aggressive on-chain scaling retains more fees than Ethereum, which shifts the majority of fees to layer-2 rollups and thereby weakens its base-layer security budget.
He compares Nakamoto Coefficients—estimating Solana’s at 19 versus Ethereum’s at 2—attributing Ethereum’s low score to its lack of native delegation and liquid-staking concentration. In governance terms, Bons highlights Solana’s on-chain mechanisms against Ethereum’s socially centralized decision-making.
Central to his thesis is the “security budget” model, which factors in market cap, fee revenue, inflation and staking rates. He values Ethereum’s budget at $50.5 billion and Solana’s at $25.3 billion, suggesting that a doubling of SOL’s price would match Ethereum’s security funding. Bons argues the causal loop—throughput → usage → fees → validator rewards → stake dispersion → censorship resistance—will allow Solana to flip its security funding from inflation to fees and ultimately surpass non-scalable chains in decentralization.
At press time, SOL traded near $199.
Bullish
The report highlights Solana’s potential to strengthen its network security and decentralization through fee-funded validator rewards and L1 scaling—key fundamentals that often drive trader confidence and long-term price appreciation. By comparing Nakamoto Coefficients and modeling security budgets, Justin Bons provides an investment thesis centered on measurable metrics rather than speculative narratives. Historically, positive on-chain fee capture and improved staking economics (as seen when Ethereum transitioned to PoS) have led to renewed market interest and price rallies. In the short term, SOL could attract speculative flows as traders anticipate a shifting decentralization narrative. Over the long term, sustained fee revenue and higher staking participation may reinforce Solana’s security and governance, further underpinning bullish sentiment for SOL relative to less scalable networks.