Solflare, a non-custodial wallet focused on the Solana network, has confirmed it will cover staking rewards missed during a validator outage triggered by a security incident at an external provider. The company stated that the incident involved the loss of control over the validator’s security keys by its operator and did not compromise any user funds.

Approximately 1.56 million SOL, valued at roughly $160 million, remained delegated to the offline validator as of Wednesday afternoon, according to data from the tracker Stakewiz. The validator was marked delinquent following the event, which Solflare first disclosed to users on Tuesday evening.

Security Incident Details

In its public statements, Solflare explained that its staking provider notified the team of a security incident on the provider’s side that affected the keys held for the Solflare validator. The wallet emphasized that delegated stake resides in each user’s own stake account and remains under the sole control of the user’s keys. Principal balances were unaffected, though rewards cease to accrue while a validator is offline.

Solflare co-founder Vidor Gencel provided further clarification, describing the situation as one in which the validator’s operator lost control of the keys. He noted that Solana’s architecture is designed so that validator keys cannot access delegated stake.

The original validator, while branded under Solflare, had been operated by a separate company. Solflare has not publicly addressed claims regarding the identity of that operator in its available statements.

Replacement Validator and Compensation Plan

Solflare activated a new replacement validator on Wednesday. The company initially indicated it was developing a compensation plan for users who migrate their stake. By Wednesday, with the new validator operational, Solflare stated it would cover the rewards missed during the outage for those who transfer their delegated stake to the replacement validator. No specific compensation amount or calculation method has been disclosed.

Users must complete the migration exclusively through the Solflare application. The company has warned that it will never contact users via direct message or distribute links related to the process through any other channel.

Migration Timeline and Process

Stake reassignment on Solana is not instantaneous. Changes take effect only at the conclusion of network epochs, each lasting approximately two days. As a result, users who initiate the migration face a multi-day period before their stake becomes active on the new validator and resumes earning rewards.

The outage has paused the accrual of staking rewards for affected delegators until the migration is complete and the new validator begins producing rewards. Solflare has positioned the compensation commitment as a means of addressing the interruption for users who complete the transfer within its application.

The incident occurs amid broader soft demand for Solana staking activity observed through October, though the immediate impact remains limited to the affected validator and its delegated stake.