Solflare has promised to reimburse users for staking rewards lost after a security incident at an external service provider forced its Solana validator offline. Around 1.56 million SOL, valued at approximately $160 million, remained delegated to the affected validator.
The Solana wallet provider said it would compensate users for the rewards they missed while the validator was unable to earn staking income.
Staking allows SOL holders to generate returns by delegating their tokens to validators, which process transactions and help maintain the blockchain. In exchange, participants receive a share of the rewards generated by their selected validator. Solflare offers an integrated staking service that lets users delegate SOL without leaving its application.
On Tuesday evening in the United States, Solflare revealed that the third-party company responsible for operating its validator had reported a security incident involving the keys it held for the service.
The company did not disclose the provider’s identity. Data from Stakewiz showed that the validator had stopped earning rewards, with approximately 1.56 million SOL still delegated to it as of Wednesday afternoon.
Solflare emphasized that users’ funds remained secure despite the disruption. The wallet provider explained that staked SOL stays in users’ individual stake accounts and remains under their control through their private keys. It also confirmed that no user funds had been compromised.
While a validator operator’s keys can affect the validator’s ability to function and earn rewards, they do not give the operator control over users’ delegated tokens.
Consequently, the primary impact is the temporary loss of staking income. The incident also exposed that the validator presented under Solflare’s branding had been operated by an outside company rather than directly by the wallet provider.
On Wednesday, Solflare announced that its replacement validator was live. It said users who transfer their stake to the new validator would receive compensation for rewards missed during the outage.
Users can move their tokens by selecting the standard unstaking option for “Solflare (Legacy)” and then delegating their SOL to the replacement validator. Those who prefer not to complete the process manually can wait for an app update that will provide step-by-step instructions.
However, the migration will take time to complete. Solana processes staking changes at the end of each epoch, which typically lasts around two days. The existing stake must finish its transition before the replacement validator can begin generating rewards for those tokens.
Solflare also cautioned users about potential phishing attempts during the migration. The company stressed that the entire process would take place inside its official application and that it would never send direct messages or external links asking users to move their stake.
