How Marinade is Making Sandwiching Validators Pay

The Solana ecosystem has a problem. Validators engaging in sandwich attacks have been exploiting users and distorting market dynamics, extracting value at the expense of everyday traders. Recent research from GhostLogs and Hanabi Staking has brought this issue into sharp focus, revealing the scope and impact of these predatory practices—and showing that many of these malicious validators have been operating within Marinade's Stake Auction Marketplace.

At Marinade, we've been grappling with this challenge head-on. As stewards of over 11 million SOL and leaders in institutional staking, we recognize our responsibility to set a higher standard. Today, we're sharing our comprehensive strategy to not just fight sandwiching validators—but to make them pay for their predatory behavior.

The Sandwiching Problem, Explained

Not all MEV (Maximal Extractable Value) is created equal. Beneficial MEV, like arbitrage that corrects price inefficiencies, actually improves market health and efficiency. It's a natural part of how decentralized markets function.

Sandwiching, however, is different. It's predatory. These attacks work by manipulating transaction ordering to extract value directly from users. While they primarily target high-slippage trades from Telegram trading bots (users who voluntarily set high slippage for fast execution), we believe any predatory MEV is unacceptable.

The impact goes beyond individual trades. Sandwiching validators can afford to bid higher in staking auctions because of their predatory profits, crowding out legitimate validators and concentrating stake with bad actors. This undermines both decentralization and fair market dynamics.

Our Journey: From Reactive to Proactive

When we first identified this issue, we took immediate action with a manual blocklist. We blacklisted 73 validators three months ago based on early research. But this reactive approach had fundamental limitations—sandwichers simply spun up new validators faster than we could identify and block them.

Our ongoing monitoring, while well-intentioned, was always one step behind. We needed a systematic approach that could stay ahead of bad actors rather than constantly playing catch-up.

Action Plan: A Multi-Layered Defense

We're implementing a comprehensive strategy inspired by the public research and methodologies from GhostLogs and Hanabi Staking. Here's how we're addressing this systematically:

Bond Slashing: Making Them Pay

Here's the game-changer: When we blacklist a validator, we must re-delegate that stake to legitimate validators, which costs significant SOL in transaction fees. We're now slashing the bonds of malicious validators to cover these re-delegation costs.

This means bad actors literally pay for the privilege of being removed from our system. Every time they try to exploit our stakers, they fund their own ejection.

Improved Reputation System (Coming Soon)

We're developing a reputation system that will limit new validators' initial stake allocation. This prevents malicious actors from quickly spinning up new validators and immediately receiving large stake delegations, making it much harder to establish profitable sandwiching operations.

Economic Deterrence

The combination of bond slashing and reputation scoring makes abuse extremely costly. Each attempt to game our system results in financial loss and barriers to re-entry, making it economically unviable for sandwichers to target SAM.

Why This Matters for the Ecosystem

Creating a Healthier Marketplace: Removing abusive validators creates a more competitive and fair auction environment. Legitimate validators with good intentions can now compete for stake without being systematically outbid by validators funded by predatory profits.

Industry Leadership: While other major staking providers face similar issues without systematic solutions, Marinade is pioneering a new approach. We're not just chasing the highest APY at any cost—we're building sustainable, ethical yield generation.

Turning Defense into Offense: Marinade's Stake Auction Marketplace is currently the only staking system that extracts value from malicious validators and returns it to the ecosystem. While others simply suffer from these attacks, we're making bad actors fund the very systems that remove them.

Impact on Stakers

We're transparent about the trade-offs. Removing high-bidding malicious validators may temporarily impact APY (estimated 0.9 percentage points on average). But this creates a more sustainable and ethical yield generation model that builds long-term value for our community.

For stakers seeking maximum protection, Marinade Select offers top-tier rewards through our curated set of 30+ verified, professionally operated validators. This provides a completely sandwiching-free environment.

Moving Forward

Our approach addresses today's challenges while building sustainable solutions for the future. By implementing these measures, we're showing that user protection and competitive returns can coexist in the staking ecosystem.

Sandwichers will continue to exist in blockchain ecosystems, but Marinade is the only provider extracting value from them rather than just suffering the costs. This operational advantage, combined with enhanced reputation systems, enables serious validators to enter and bid for stake. This increased competition means Marinade will provide the best yield through SAM.

Marinade believes this approach creates sustainable competitive advantages in the staking market.

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