Solana price is getting better at shaking off major outages
Solana went down — again — but its native cryptocurrency SOL barely budged
Vladimir Kazakov/Shutterstock modified by Blockworks
Solana was totally unusable for five hours on Tuesday — effectively placing more than $1.6 billion in crypto locked inside the network’s DeFi apps in limbo.
Those watching price charts might have hardly noticed. The price of SOL, the blockchain’s native token, fell up to 3% amid the halt but quickly recovered, even before the network was restarted.
Tuesday’s halt was Solana’s sixth major outage, according to Solana Labs’ network uptime portal. The previous incident occurred almost a year ago, when a string of service providers running custom software mistakenly flooded the chain with data.
Read more: Solana price dips as outage requires a network restart
Solana hasn’t gone a full year without a major outage since September 2021, back when the network saw much less activity and far lower total value locked (TVL).
Tracking prices around each one suggests the impact of downtime on SOL has diminished over time.
The first three major outages, which occurred in just nine months, preceded price crashes of between 10% and 15% in the following twelve hours.
Markets barely reacted at all to the next two, besides a brief 4.2% dip in the early stages of the 19-hour spell last February.
This week’s outage seems to have caused the second-smallest price impact of the six. In fact, SOL was, at one point, almost 2% ahead as developers were working on a patch.
An official post-mortem hasn’t yet been shared but it seems the culprit was a bug in some code that instructs native apps how to operate.
Reports indicate that developers had previously identified and patched the bug in the network’s testnet. Production protocols meant the fix hadn’t yet been pushed onto mainnet.
Participants around the world rushed to determine how best to patch and restart the chain in the official Discord server, with the whole process taking about five hours.
Solana goes down when hitting a problem — by design
Downtime is a touchy subject in crypto circles, as illustrated by the stream of memes about Solana’s history of service interruptions.
Purists would say the technology underpinning blockchain networks should be free of central points of failure — decentralized to the point that system-wide stoppages are far less likely than in Web2 stacks.
So, Solana users may have felt a little hot under the collar during the downtime, especially those with open perpetual swap positions.
Perp traders on Solana can add leverage by posting crypto as collateral: stablecoins, bitcoin (BTC) and ether (ETH), but also SOL and memecoin BONK.
Prices, hypothetically, could have dropped significantly in the time it took for developers to figure out a fix, resulting in a sudden wave of margin calls when Solana was brought back online.
The market shrugged off the whole thing, so that wave never came.
Read more: Solana’s DeFi users mostly unbothered by network outage
The dampened market response could suggest an understanding that Solana prioritizes “safety” over “liveness” — similar to Tendermint chains like Cosmos — which means the network opts to stop propagating blocks altogether when consensus breaks down.
Bitcoin and Ethereum are otherwise built to process transactions at all costs, even if that means multiple versions of the network operate simultaneously.
In such a scenario, the chain with the longest (or heaviest) transaction history is considered the primary ledger, resulting in service that isn’t completely interrupted when consensus breaks down. Both styles have pros and cons.
More likely though is that markets hold a degree of trust in the Solana developmental structure to deal with these kinds of bugs.
If they could bring the chain back online five times, why not six.
In any case, it’s not so uncommon for popular blockchains to go dark. Polygon, XRP, Avalanche, Stellar and even Ethereum have all suffered major outages analogous to Solana’s. This likely won’t be the last.
Solana’s most recent glitch is another reminder that for all the hundreds of billions of dollars sloshing around, the blockchain space is a highly experimental financial sandbox.
It still needs a quick reboot every now and then.
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