Solana Price Dips After Another Network Outage

Solana’s market capitalization dropped by over 11% after the network outage on Wednesday

article-image

blockworks exclusive art by axel rangel

share

key takeaways

  • The outage was handled swiftly in less than 4 1/2 hours
  • Solana developers made “fundamental design choices” to improve base layer throughput — at the expense of network reliability, industry exec says

The Solana network took another reputational hit this week, booking its latest in a series of outages in 2022. 

The most recent downtime, this Wednesday, came just a month after bots swarmed popular non-fungible token (NFT) minting protocol Candy Machine, pushing validators out of consensus and crashing nodes. 

This time, validators — which sign off on block transactions — were manipulated so that the network ceased to produce blocks, as validators were prevented from reaching a consensus. The network was restarted about 4 ½ hours later. 

Loading Tweet..

Michael Arrington, founder of Arrington Capital, a crypto investment firm, told Blockworks that Solana’s developers have made “fundamental design choices” to improve base layer throughput — at the expense of network reliability.

“We don’t believe these technical trade-offs are necessary, and there are other networks, like Bitcoin and Algorand, which do not sacrifice robustness for performance,” Arrington said.

Following the downturn, Solana’s market capitalization dropped by over 11% in 24 hours. It is trading at roughly $40 as of 7 pm ET, down by over 80% since its all-time high of $260.06 in November 2021.

Even so, Sergey Vasylchuk, CEO of Everstake, Solana’s biggest validator and co-developer of Metaplex, said he’s still optimistic on the beleaguered protocol.

 “The blockchain industry is up and running, and it’s common for new areas to face crises,” Vasylchuk told Blockworks. “For the past four years, my company has been running over 8,000 nodes for 50 blockchain networks. We’ve been in Solana since the very beginning of its story. What I can say for sure is that the Solana community knows how to tackle problems very fast.”

The relatively short span of the outage, Vasylchuk said, points to the ecosystem learning from past mistakes.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Unlocked by Template.png

Research

With the spot ETH ETF approval, the institutions are coming. stETH - given its dominance in marketshare, existing liquid market structures, and highly desirable properties - is poised for institutions.

article-image

Launching cryptocurrencies the old fashioned way may soon make a return

article-image

Kraken and CertiK brought their beef to social media after Kraken said researchers exploited $3 million through a bug

article-image

NVIDIA’s historic run is only deepening the divide between mega-cap tech stocks and the rest of the market.

article-image

EIP-7702 was quickly adopted for the next Ethereum upgrade, but developers haven’t quite locked it down