Solana is a blockchain platform that hosts decentralized financial applications (dApps). It is known for fast transactions and a smooth user experience. Solana is the first and only blockchain that uses a consensus mechanism called proof of history. It can process more than 50,000 transactions per second with gas fees as low as $0.000025 per transaction. This makes it one of the fastest blockchain networks on the market today.
Its current support of DeFi, NFT, and Web3 projects made the price of its native coin, SOL, more than triple in 2021 alone. Users can make use of the coin to pay transaction fees, for staking, and for use within DeFi applications.
Solana’s large futures and derivative markets coupled with its large involvement in the Web3 technology have placed it in a favorable position to get more mainstream investment. It could be a leader in the crypto industry over the next few years, but the network has been experiencing a lot of outages lately. These outages have made a lot of investors doubtful about the future of the platform.
History of Outages
On the 17th of September 2021, users had to wait for 17 long hours before they could buy or sell SOL tokens. The whole network suffered an outage and could not process any transactions. A few minutes after the outage, the Solana team announced the outage was a result of a denial of service attack on the network. The root cause was an increase in bot activities that pushed more than 400,000 transactions per second which overwhelmed the Solana network.
Additionally, the network experienced a DDoS attack on the 4th of January 2022. According to Colin Wu, the hacker spammed the network in order to carry out the attack. A couple of days later, on the 21st of January, the network suffered yet another outage which lasted for 48 hours. A report on the Solana status page claimed that the issue was caused by excessive duplicate transactions by bots.
Two days later, the Solana team released an upgraded version that was meant to solve those issues. During the outage, CoinGecko data indicated that the network’s native token, SOL, experienced a 12.5% drop during the outage period.
The network went down for the 7th time in 2022 on May 1, this time being down for 7 hours. This outage was caused by NFT minting bots flooding the network with transactions.
Red Flags or Growing Pains
Crypto traders and DeFi users have expressed their concerns as to how the Solana network can be really unreliable when needed. The inability to make transactions on the network during outages can be problematic for traders, especially margin traders who use leverage within their trades. If these outages become more frequent, users’ confidence in the project could definitely decline.
To some degree, the outages of the Solana network can be traced to the centralized nature of its Proof-of-History mechanism. This is because even though the Solana network has more than 1700 + validators to validate transactions on the network, 23 of them hold over 33% of the total stake, meaning they are most likely to process transactions. Proof of history means that the validator can be known ahead of block production, leading to spamming of those validators. Most Solana outages happened because a lot of the validators were spammed and then crashed, leading to a slowing down of the network, eventually stalling it.
There is a warning on the Solana staking page that the 23 validators with 33% of the total stake could censor and halt the network if they colluded.
It is nearly impossible for projects to be without flaws as the most important thing is that they are working towards making it better every day. But Solana must take extra caution in identifying and rectifying these issues in time in order to maintain its position as a leading cryptocurrency platform.
Source: https://www.cryptovantage.com/news/solana-suffers-another-outage-to-start-2022-is-this-a-trend/
