Bessie Liu

Once dubbed an “Ethereum killer” for its low costs and fast transaction speeds, the Solana blockchain has been hit particularly hard by the collapse of centralized exchange FTX and its sister company Alameda Research.



Solana was once <a href="https://blockworks.co/news/solana-community-remains-bullish-despite-ftx-fallout" target="_blank" rel="noreferrer noopener">heavily</a> backed by former FTX CEO Sam Bankman-Fried, and Alameda Research <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/?outputType=amp" target="_blank" rel="noreferrer noopener">reportedly</a> held an estimated $1.2 billion in SOL tokens — its second largest position.



Traders sold their solana en masse once the FTX scandal broke, about a week following details of its illiquid balance sheet. SOL has since plummeted 60%, from above $35 to less than $12. SOL now sits at over 95% below its record high set last November.&nbsp;



Beyond markets, the price crash has also shaken the core of its ecosystem believers. Multiple Solana projects including NFT marketplace MagicEden, crypto wallet Phantom and NFT project DeGods have <a href="https://blockworks.co/news/top-solana-nft-projects-are-jumping-ship-to-ethereum-polygon" target="_blank" rel="noreferrer noopener">recently shared plans to transition</a> to a multichain world.&nbsp;



It&#8217;s a move Solana Labs co-founder Anatoly Yakovenko <a href="https://twitter.com/aeyakovenko/status/1607449836831358981?t=dKm2K7VPMC8lvA3p61H4Iw&amp;s=19" target="_blank" rel="noreferrer noopener">says</a> is “bittersweet to watch.” 



Still, Yakovenko and co-founder Raj Gokal have not lost hope for the blockchain. In fact, the firm has been actively seeking ways to support projects across its ecosystem.



In a recent conversation with Blockworks, Yakovenko and Gokal discuss what’s next for Solana.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Blockworks: How have things been since the FTX implosion?



Gokal: It’s been a rollercoaster of a month. For the Solana ecosystem, having a strong showing of in-person support and cohesion right before the FTX collapse was quite a stark contrast.



I think the most acute examples are the teams that had their treasury, or a portion of their treasury, on FTX, which I think is an issue that exists across the crypto industry. On Solana, we saw a single digit percent of teams with that impact, and the foundation’s role with those teams was just connecting them with investors. We had an outpouring of support from both traditional [venture capitalists] and those that have been on the sidelines looking for an entry point into crypto.



On the bright side, the other piece of the market volatility during that collapse was that the network was performing. We had a lot of liquidations, record volatility, the volumes for DeFi were 6x what they were before the FTX collapse, and there were no outages and no performance degradation.



So there’s just been a lot of bittersweet [emotions]. We’ve moved past a lot of the old issues and now we’re just dealing with this part of the market cycle, which I think is rough for everybody.&nbsp;



Blockworks: There are concerns that Solana’s decentralized exchange Serum was compromised during the apparent FTX hack. Could you explain what happened?



Yakovenko: During the FTX collapse, somebody started withdrawing funds from FTX and people weren’t sure if it was hacked or if they were real transfers. It seemed like FTX itself was being compromised.



Developers knew already that the Serum program was not controlled by a DAO: It was controlled by keys that were custodied at FTX, so there was a fear that those keys were compromised as well.&nbsp;



People just started working on forking the Serum program — by taking the exact same open source code and re-deploying it under a new address with different upgrade authority to different keys — basically controlling how that program can be upgraded by moving all the projects that were using Serum, including market makers, to this thing called Open Book, which was byte for byte the exact same code used on Serum but now under the control of a DAO.



That moment was like a psychological turning point for me, because it really felt like everything was falling apart. But seeing all the developers come together, I was able to be like: “Okay, there are people that know what they’re doing, that actually understand these very sophisticated systems and how to fix it.”



The people that did this weren&#8217;t big companies. They were a bunch of hobbyists and small teams. It was really cool to see how quickly real decentralized communities can recover from failure when a centralized actor blows up.



Gokal: It was another bittersweet thing. It was a shame that upgrade keys for Serum may have been compromised and that the protocol had to be forked.&nbsp;



But the fact that it happened independently, with multiple DeFi protocols that use Serum all coming together to quickly coordinate the fork…it’s a sign of maturity for the ecosystem. Every system has to have a major “oh shit” moment, like what Bitcoin had with Mt. Gox, and what Ethereum had with The DAO hack.&nbsp;



We saw the same things happen in those ecosystems…and people really had to ask the hard questions about why they’re building in that ecosystem, why they came in the first place and what they want the future of the ecosystem to be.



I think there&#8217;s no other way to produce this outcome.



Blockworks: You mention how this is a time where people come together and build a vision for the future. What does that look like for Solana?



Gokal: I think if you talk to developers, they’ll mostly tell you that we’re just scratching the surface of what can be built using Solana that can’t be built anywhere else.&nbsp;



For example, Teleport was demo-ing a decentralized Uber that actually works, Hivemapper is building a decentralized mapping service and Helium moved over from their own chain. All these projects just couldn’t really exist on any other network.



Blockworks: The price of SOL has tanked significantly since everything that has happened a month ago, what do you think needs to be done within the ecosystem for people to have confidence again?



Yakovenko: We generally don&#8217;t talk about Solana’s price. We&#8217;re in a clear bear market for crypto…but what we saw year over year, and at BreakPoint, is just the difference between a conference last year and this year…we have twice as many people show up.



The number of smart people entering the space and building and creating products is just growing. I would bet that over the next year, the number of products that are going to launch in crypto is going to be more than all the other years combined.



Blockworks: How do you think the regulatory landscape will change following the recent events?&nbsp;



Yakovenko: I’m generally very bullish on US regulation, eventually setting some right lines about what’s okay to build, what&#8217;s not okay to build and how you launch these things. That&#8217;s really what&#8217;s missing right now.&nbsp;



The big fear and uncertainty for founders is that they don&#8217;t know. It&#8217;s very expensive to get a very poor answer from lawyers. You can&#8217;t have somebody that raises, let&#8217;s say, $3 million for their seed round, then having to spend 50% of it on lawyer fees just to launch a product. That&#8217;s not sustainable, and it’s causing folks to leave the US because those teams would rather launch their products offshore. I think that needs to be corrected.&nbsp;



But in general, I think the US government moves really slowly, like it did in the 90s. But eventually they passed legislation that enabled all these companies that you see today to have created massive amounts of value for the world. And I&#8217;m pretty certain that&#8217;s going to happen in crypto, too.



Blockworks: Any additional thoughts or comments?



Yakovenko: Stripe recently announced its integration with Solana, and I know many of these companies see crypto as an integral part of their future. These are big companies with millions of users. And that&#8217;s just going to keep happening.&nbsp;



More and more people are going to understand self custody and learn what that means — they&#8217;re gonna know what it means to actually use cryptography. That powerful tool is gonna keep growing, just like the internet did.&nbsp;



That’s the future we’re building for. This is a blip, it sucks, but in the end — four or five years later — barely anyone is going to remember it.



This interview has been edited for clarity and brevity.



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Q&A: A Conversation With Solana Founders Raj and Anatoly

Solana, once championed as the “Ethereum Killer” has seen the price of its native token SOL tank by roughly <a href="https://cms.blockworks.co/prices/" target="_blank" rel="noreferrer noopener">47%</a> over the past week dominated by the FTX train wreck.



SOL is the <a href="https://twitter.com/R89Capital/status/1589268233559101440" target="_blank" rel="noreferrer noopener">second largest-holding</a> of Alameda Research, and was heavily promoted by former FTX CEO Sam Bankman-Fried, who <a href="https://cms.blockworks.co/news/ftx-ceo-bankman-fried-resigns-bankruptcy-proceedings-begin/" target="_blank" rel="noreferrer noopener">resigned today</a>.&nbsp;



According to an earlier <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/?outputType=amp" target="_blank" rel="noreferrer noopener">report by CoinDesk</a>, Alameda held $292 million of “unlocked SOL,” $863 million of “locked SOL” and $41 million of “SOL collateral,”&nbsp; as of June 30, 2022.



Akeel Qureshi, core contributor to Solana-based Hubble Protocol and Kamino Finance told Blockworks that the current crypto crisis ensuing from FTX’s bankruptcy filing is reminiscent of the fall of banks during the 2008 financial crisis.



<h3>FTX contagion effects</h3>



“The fallout from the bankruptcy announcement was immediate contagion, and we’re watching another leg down for assets associated with FTX and Alameda,” Qureshi said. “SOL, the native token of Solana, has taken a further hit due to Sam Bankman-Fried’s past open support of the network.”



In fact, according to a post by Twitter user weremeow, one of the largest challenges that the Solana ecosystem faces is that wrapped Sollet tokens such as soBTC are issued by the now-insolvent FTX.



“These tokens were launched very early in the Solana DeFi cycle to help generate liquidity in the space, and supposed to be backed 1-1 by BTC or ETH,” they tweeted. “But unlike wBTC, there was no formal process and no one knows if FTX still have the underlying assets.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">1/ One of the most challenging and unspoken issue facing the <a href="https://twitter.com/solana?ref_src=twsrc%5Etfw">@solana</a> ecosystem are the wrapped Sollet tokens, namely soBTC, which is used widely across lending and AMM platforms. The problem? These tokens are issued by FTX (or Alameda, no one really knows)&mdash; meow (@weremeow) <a href="https://twitter.com/weremeow/status/1590461628864397312?ref_src=twsrc%5Etfw">November 9, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



As all major Solana-based DeFi platforms have soBTC assets as collateral, if it is revealed that soBTC no longer has any underlying assets backing its value, the contagion effect of all of this could be much worse than expected.&nbsp;



Weighing on the situation, <a href="https://www.blockworksresearch.com/" target="_blank" rel="noreferrer noopener">Blockworks Research</a> analyst Spencer Hughes said, &#8220;Solana currently has <a href="https://solscan.io/token/9n4nbM75f5Ui33ZbPYXn59EwSgE8CGsHtAeTH5YFeJ9E" target="_blank" rel="noreferrer noopener">$271M</a> of soBTC and <a href="https://solscan.io/token/2FPyTwcZLUg1MDrwsyoP4D6s1tM7hAkHYRjkNb5w6Pxk" target="_blank" rel="noreferrer noopener">$612M </a>of soETH on the network. These assets were supposedly bridged from the Ethereum network. It is unclear who exactly is backing these assets, but many speculate that it is FTX.&nbsp;



As a consequence, he added, “soBTC is currently trading at $13.5K, a steep 25% discount from the price of BTC. At one point, soBTC was trading for $3,400. In the meantime, DeFi lending platform Solend has paused all borrows collateralized by soBTC.”



Earlier this week, Solend struggled to liquidate a whale account which tanked. Although the <a href="https://twitter.com/solendprotocol/status/1590749151980945414?" target="_blank" rel="noreferrer noopener">situation was later resolved</a>, Solend&#8217;s head of growth Soju wrote on the <a href="https://discord.com/channels/839224914720325703/1009605878460194897/1039928653427003422" target="_blank" rel="noreferrer noopener">its Discord </a>that the situation was “looking very bad now.” 



Liquidity crunches are not the only concerns faced by the Solana community. Earlier this week, the Solana Foundation revealed that <a href="https://twitter.com/thedata_nerd/status/1590307325650182144" target="_blank" rel="noreferrer noopener">47 million SOL</a> would be unstaked from the ecosystem, a poorly-timed move that was <a href="https://twitter.com/SolanaFndn/status/1590464124827635712" target="_blank" rel="noreferrer noopener">quickly reversed</a>.



<h3>Community optimism</h3>



Despite these multiple challenges since the FTX fallout, many builders in the ecosystem remain resilient.&nbsp;



Tiffany Huang, the head of marketing at Magic Eden, the largest NFT Marketplace on Solana told Blockworks that, “in spite of these developments, we remain as hopeful as ever about Solana&#8217;s critical role in building a decentralized ecosystem.”



<blockquote class="wp-block-quote">“As we pick up the pieces, we are going to keep building from a place of deep belief. We remain bullish on the future of Solana and have seen the community come together to remind each other of the incredible projects that have come to market,” Huang said.</blockquote>



This sentiment is shared by Jules Mossler the chief marketing officer at Metaplex Studios who told Blockworks, “We are now seeing projects support each other and plan the next chapter of reinvestment together, and we’ll be right there with them.”



An outpouring of support from crypto twitter has also been apparent over the past few days.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">this crucible moment for <a href="https://twitter.com/solana?ref_src=twsrc%5Etfw">@solana</a> ecosystem is as difficult as the last one. the difference is, there are 10x more of us to band together this time. next time, there will be 10x more. and each time, we&#39;re stronger. the fundamentals are better. same goes for crypto at large, tbh&mdash; raj 🖤 (@rajgokal) <a href="https://twitter.com/rajgokal/status/1590359525521264640?ref_src=twsrc%5Etfw">November 9, 2022</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Co-founder of Solana Labs Anatoly Yakovenko <a href="https://twitter.com/aeyakovenko/status/1590348163722145793" target="_blank" rel="noreferrer noopener">tweeted</a>, “the builders on Solana are second to none, and the projects they&#8217;re building can often only be built on Solana.”



Adding that, “we launched in 2020 after markets crashed and the world went into lockdown — chewing glass is in our DNA, and we&#8217;ll get through together.”



Qureshi believes that the latest events that have unfolded is a tell-tale sign which echoes the importance of decentralization.



“​​Meanwhile, centralized crypto exchanges and lenders with closed books are in the crosshairs, but decentralized finance (DeFi) is looking stronger than ever due to its transparency and reliance on users custodying their own assets,” Qureshi said.



As the ecosystem works on recovering from the shakeup, it is expected that there will be a lot more quality DeFi projects that will help the ecosystem prevail, he said.&nbsp;



The price of solana is now around $16, down by <a href="https://www.coingecko.com/en/coins/solana" target="_blank" rel="noreferrer noopener">about 9%</a> in the past 24 hours.



Ornella Hernandez contributed reporting.



Updated on Nov. 16, 2022 at 11:11 am ET: Soju is the head of growth at Solend.



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Solana Community Remains Bullish Despite FTX Fallout

Sam Reynolds

<div id="highlights-block_61bb38bef1c56" class="highlights">
 <ul>
 <li>Solana is beginning the Thursday trading day up 12%, recovering from prior losses inflicted by a network freeze after it couldn’t handle the demand from a popular IDO</li>
 <li>Solana led the overall digital assets market in gains after the Fed announced it would begin tapering, and, Galaxy Digital</li>
 </ul>
 
</div>



SOL is set to begin the Thursday trading day up almost 12.5% as two key and unrelated announcements turned the Solana network’s fortune around after it suffered a series of failures on the back of a popular Initial Dex Offering (IDO) that was based on its network.&nbsp;



Earlier this week, the launch of the anticipated SolChicks Play-to-Earn NFT project ground the Solana network and the Raydium DEX — based on Solana — to a virtual halt due to network congestion.&nbsp;&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">(Thread 1/2) CHICKS HAVE TAKEN SOLANA DOWN 🐣 We apologize for the inconvenience of this delay but tens of thousands of people are trying to buy <a href="https://twitter.com/search?q=%24CHICKS&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$CHICKS</a> and the Raydium server has crashed. It appears SolScan is also not loading our contract address right now either. <a href="https://t.co/WX0uqKlgZR">pic.twitter.com/WX0uqKlgZR</a>&mdash; SolChicks (@SolChicksNFT) <a href="https://twitter.com/SolChicksNFT/status/1470399522920493062?ref_src=twsrc%5Etfw">December 13, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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Data from various Solana block explorers shows that the number of transactions per second over the Solana network fell to about 700 down from an average of around 2000 and full capacity of about 65,000. At one point, SolanaBeach, a Block Explorer, showed that upwards of 50% of transactions were failing.



For his part, Anatoly Yakovenko, Solana Labs CEO, chalked this up to growing pains and suggested that this was another case of congestion which frequently happens during aggressive trading events or successful IDO launches.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">same as friday! can&#39;t yolo changes into mainnet-beta, fixes are baking, should be ready soon<a href="https://t.co/TAI1OF6UF0">https://t.co/TAI1OF6UF0</a>&mdash; anat◎ly 🦀🤿🏒 🤙 (@aeyakovenko) <a href="https://twitter.com/aeyakovenko/status/1470427941578231809?ref_src=twsrc%5Etfw">December 13, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Despite all this, institutional interest in Solana remains strong, which is likely driving up the price of SOL.&nbsp;



On Wednesday, <a href="https://cms.blockworks.co/galaxy-launches-new-institutional-solana-fund-to-track-bloomberg-index/">Galaxy Digital announced</a> that it was launching an institutional-focused investment fund, Galaxy Solana Funds, which tracks the performance of the Bloomberg Galaxy Solana Index.



Generally, most large-cap cryptos opened higher on Thursday after the Fed announced late Wednesday that it plans to speed up its asset purchase tapering timeline and move towards more rate hikes in 2022 on news of record inflation.



Bitcoin has remained above $48,500 since the FOMC meeting results, according to <a href="https://www.coingecko.com/en">CoinGecko</a>, while ether and Binance’s BNB have also bounced sharply. In addition to this macro news, SOL also appeared to react favorably to an announcement that Michael Jordan and his son Jeffrey are launching <a href="https://www.heir.app/" target="_blank" rel="noreferrer noopener">HEIR</a>, what they call a Web3 fan engagement platform built on Solana. HEIR has already raised $10 million and is set to launch in 2022. 



SOL remains almost 30% below its all-time high of $260, set on Nov. 6.




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Fed Decision, Galaxy Fund, and Celebrities Push SOL to Recovery After Network Freeze

<div id="highlights-block_618939a3eec02" class="highlights">
 <ul>
 <li>Solana’s growth story is one that’s now defined in the billions, but there’s been some challenges along the way</li>
 <li>Solana Labs CEO says it&#8217;s in the group’s culture to embrace every challenge in the hardest possible way: ‘Eating glass’ while changing the world.</li>
 </ul>
 
</div>



Breakpoint 2021, Lisbon, Portugal — There’s a lot going right with Solana and its ecosystem: $15.2 billion in total value locked into DeFI projects on the protocol; $2 billion in investment from the who’s who in the crypto ecosystem, and a sold-out Breakpoint conference in Lisbon.



But for everything that goes right with Solana, sometimes things also go wrong:&nbsp;In September the entire network suffered a <a href="https://cms.blockworks.co/solana-recovers-after-10-hour-outage/" target="_blank" rel="noreferrer noopener">brutal 10-hour outage</a> with a double-digit fall in the token’s value.



It’s times like this, Solana Labs CEO Anatoly Yakovenko said on stage in Lisbon, that the team learned to “eat glass,” a metaphor for enduring a tough experience. The global state machine, as Yakovenko calls the Solana network, isn’t without its challenges. But the team, he says, enjoys this head-first journey into “maximum pain.”



Part of the evolving debate surrounding any growing blockchain is the extent to which it realizes the goal of decentralization, sometimes quantified as ‘the Nakamoto coefficient’, in reference to Bitcoin’s pseudonymous founder Satoshi Nakamoto. A network with high transaction throughput might be a highly centralized one, or one which is inherently insecure.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">This is how you measure the value of a protocol, not fee revenue <a href="https://t.co/trqxU4K7AX">https://t.co/trqxU4K7AX</a>&mdash; cy (@chasingyield_) <a href="https://twitter.com/chasingyield_/status/1457651159628345348?ref_src=twsrc%5Etfw">November 8, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



For Yakovenko, this isn’t a trade-off, as one of his goals is to change paradigms and behavior so that “voting power and the distribution of nodes actually maximizes the Nakamoto coefficient.” It can only go one-way, as he explained on stage. Rather than stress decentralization, for now the network’s success is measured in terms of the nearly 40 billion transactions and 1.26 million active accounts transacting without nagging gas fees.&nbsp;



“The hard part is finding the humans that want to run the network,” he said, giving an anecdote on how there are validators in the middle of Russia that use the country’s naturally chilly temperature as a reason to set up data centers in the middle of barren fields.&nbsp;The <a href="https://docs.solana.com/running-validator/validator-reqs" target="_blank" rel="noreferrer noopener">technical requirements</a> to run a Solana node are quite steep relative to nodes on Bitcoin or Ethereum.



For the Solana team, the next challenge will be to expand the number of validators dramatically. Currently, there are around 1,150 but as the race to validating 100,000 transactions per second continues, there’s going to need to be a lot more of them.&nbsp;



But finding these next humans might not be quite as much of a glass eating challenge; it could be harder to match Ethereum’s massive lead in developer talent, with tens of thousands of active devs <a href="https://entethalliance.org/ethereum-innovation-cycle-for-business-and-commerce/" target="_blank" rel="noreferrer noopener">according to</a> the Enterprise Ethereum Alliance. By contrast, there were 100 participants at Solana’s first hackathon. Now, and the most recent one here in Lisbon, that number is closer to 600.



Yakovenko wants more. “1 million is our goal, that’s a 1000x growth,” he said, mirroring the “One Million Devs” initiative for Ethereum <a href="https://media.consensys.net/one-million-ethereum-developers-five-consensys-announcements-from-devcon-5-28520ce63d73" target="_blank" rel="noreferrer noopener">undertaken in 2019</a> by ConsenSys.



Solana’s token, SOL, is currently trading for $247 according to <a href="https://www.coingecko.com/en/coins/solana" target="_blank" rel="noreferrer noopener">CoinGecko data</a>, up 20% on-week.



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The ‘Solana Summer’ Never Ends

Macauley Peterson

<div id="highlights-block_6141c830ad668" class="highlights">
 <ul>
 <li>Mainnet beta restart completed by 6:00 AM (UTC), restoring service</li>
 <li>$SOL token up 10% off the outage low of $142, but lags $BTC</li>
 </ul>
 
</div>



The Solana blockchain <a href="https://cms.blockworks.co/sol-stumbles-as-solana-struggles-with-technical-issues/" target="_blank" rel="noreferrer noopener">suffered a major outage</a> yesterday, which ultimately forced a network restart following a hurried bug-fixing upgrade, to curtail uncontrollable forking of the chain. 



Although still technically in beta, the protocol&#8217;s growing DeFi ecosystem has amassed nearly <a href="https://defillama.com/chains" target="_blank" rel="noreferrer noopener">$11 billion in total value locked</a>, and Solana has also tapped into the latest NFT mania, propelling its $SOL token into the top 10 by market cap at over $47 billion.



A patch was released Tuesday afternoon, requiring the community of validators who operate the network to coordinate a software update and restart the chain, a process which <a href="https://twitter.com/SolanaStatus/status/1438020110451609603" target="_blank" rel="noreferrer noopener">was completed early Wednesday</a>, according to the Solana Foundation.



Solana is a proof-of-stake smart contract blockchain, one of the few such protocols that is incompatible with the Ethereum Virtual Machine (EVM). Ethereum suffered <a href="https://cms.blockworks.co/bug-in-ethereum-interface-causes-inadvertent-chain-split-chaos-on-network/" target="_blank" rel="noreferrer noopener">an unintentional fork</a> on August 27th, after a bug in one of the main Ethereum clients was exploited, but the practical effect on network activity was comparatively mild.



The CEO of Solana Labs, Anatoly Yakovenko, <a href="https://twitter.com/aeyakovenko/status/1437887482897518595" target="_blank" rel="noreferrer noopener">tweeted</a> wryly, &#8220;better now then [SIC] when its a billion users&#8221;.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">better now then when its a billion users&mdash; anat◎ly 🦀🤿🏒 🤙 (@aeyakovenko) <a href="https://twitter.com/aeyakovenko/status/1437887482897518595?ref_src=twsrc%5Etfw">September 14, 2021</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
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In the aftermath of the blockchain&#8217;s network instability, the $SOL token fell by roughly 16% from its daily open, but bounced sharply once the network restart was initiated. The Solana mainnet needed 80% of the $SOL staked across its <a href="https://solanabeach.io/validators" target="_blank" rel="noreferrer noopener">approximately 1000 validator nodes</a>, to successfully restart, which accounts for the length of the outage following the release of the software patch.



The token has rallied over 10% from its Tuesday low in dollar terms, but just 8% when measured against bitcoin.



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Solana Recovers After 10-hour Outage

Jacquelyn Melinek

<div id="highlights-block_613119828fcde" class="highlights">
 <ul>
 <li>With all these big ideas and growth entering the crypto space, the skepticism is what makes it possible, he said</li>
 <li>A lot of market players view Solana as a competitor to Ethereum’s blockchain platform. Yakovenko welcomes the competition and compares it to playing hockey</li>
 </ul>
 
</div>



The altcoin solana (SOL) has seen extreme growth in just the past month, climbing from $33.3 on the month-ago date to an <a href="https://cms.blockworks.co/solana-hits-ath-oils-choppy-trading-amid-hurricane-ida-markets-wrap/" target="_blank" rel="noreferrer noopener">all-time high</a> of $130.01 on August 31. But, believe it or not, Solana Labs Founder and CEO Anatoly Yakovenko is a crypto skeptic.



SOL coin aside, Solana is best known for its decentralized blockchain platform, which is centered on creating the cheapest, fastest and most censorship-resistant network possible, according to <a href="https://github.com/aeyakovenko" target="_blank" rel="noreferrer noopener">Yakovenko</a>.



The four-year old blockchain platform has grown rapidly since its inception. Its blockchain ecosystem consists of over 400 projects focusing on topics like DeFi, NFTs and Web3. In fact, the platform helps build big-name crypto companies like Sam Bankman-Fried’s crypto exchange FTX and quantitative trading firm Alameda Research, as well as other companies.&nbsp;



In addition to those big-name users, Solana has big-name investors that have backed the company with hundreds of millions of dollars. Earlier this year, the company raised <a href="https://cms.blockworks.co/solana-labs-ceo-shares-roadmap-following-314m-fundraise/" target="_blank" rel="noreferrer noopener">$314 million</a> in a private token sale led by a16z and Polychain Capital.



The company has no plans to slow down, either. This week, Solana launched its fourth hackathon <a href="https://cms.blockworks.co/solana-ignition-hackathon-to-focus-on-defi-web3-gaming-and-nfts/" target="_blank" rel="noreferrer noopener">event</a> in an effort to expand the ecosystem even further.



<h3>A crypto skeptic</h3>



<blockquote class="wp-block-quote">However, with all this success, Yakovenko told Blockworks in an interview, “I’m a skeptic, I’m probably the biggest skeptic of crypto.”</blockquote>



But, why? Well, the current environment is extremely similar to the 1990s, Yakovenko said. That was a time when huge dreamers, ideas and companies like Six Degrees, popped up, only for them to disappear shortly after, he added. For context, Six Degrees is widely considered the first social networking site. Founded by Andrew Weinreich in May 1996, Six Degrees collapsed in 2000 due to low revenue and internet connectivity limitations.&nbsp;



The 1990s was a time when the US saw rapid innovation and the rise of new technologies, fueled by investments in internet-based companies. Many companies like Six Degrees closed shop, but paved the way for social media platforms that still exist today like Facebook, LinkedIn and Twitter.&nbsp;



“It was really hard to believe that Six Degrees or chainmail letters would end up with a trillion dollar company like Facebook. Just this idea that you can connect people socially over the internet, what was that worth? And in the 90s you would have thought that was crazy to think that it was worth anything,” Yakovenko said. “This idea that people self-custody with just cryptography and a little bit of math, that could create so much value. I think that is just as crazy and ludicrous,” he added.&nbsp;



<h3>Far from “Ethereum Killer”&nbsp;</h3>



A lot of market players view Solana as a competitor to Ethereum’s blockchain platform. Yakovenko welcomes the competition and compares it to playing hockey.



“The competition is awesome, I love competition,” he said. “I played hockey my whole life so whatever you can compete at, I’m happy to compete, whether it&#8217;s hockey or building blockchains,” he said.



Although some people have called Solana the “Ethereum Killer,” Yakovenko said that comparison is far from the truth. While he is skeptical about crypto itself, he believes the technologies available on the blockchain will succeed.&nbsp;



In fact, blockchain platforms like Solana or Ethereum are extremely resilient to anyone — or anything — that tries to kill it, he said.&nbsp;



Due to the open-source nature of both blockchains, developers are constantly building and scaling the networks in ways that have given companies like Microsoft the ability to last.



“We have a certain vision which is to build the cheapest, fastest most censorship resistant network and [Ethereum] has a different vision, which is like let&#8217;s build the cheapest way to validate on a very large decentralized blockchain,” Yakovenko said. “Both visions I think are interesting approaches to the same problem, it’s two sides of the same coin. A lot of folks are passionate about both approaches so happy to compete. It only makes both of us better.”



<h3>NFTs booming growth&nbsp;</h3>



Although Yakovenko said he doesn’t know what has specifically caused the massive price movements for Solana’s cryptocurrency, he said he hopes it’s correlated to how important it is for people to use the Solana network. He also said that there has been strong growth and demand for NFTs on Solana’s platform in the past month and over 90,000 NFTs have been minted in the past two months, which could possibly contribute to the spike.



Amid the craze of people minting NFTs, Yakovenko said, “I tried to mint a couple, but I’m too slow.” He added that many of the Solanart NFTs were sold out in four to five seconds.



Overall, Yakovenko said he expects to see communities continue to rapidly form around ownership of these NFTs. “The groups are as strong as ones you’d find on any other social media platform, if not stronger,” he added.&nbsp;



“NFTs are almost like a decentralized version of Reddit, you don’t need the messaging side of it,” he said. “What you need is some combination of tokens and/or NFTs to tie together and they will self organize elsewhere on Reddit, Twitter or Telegram,” he added.&nbsp;



But with all these big ideas and growth entering the crypto space, the skepticism is what makes it possible, he said.&nbsp;



“I’m blown away by the success we’ve seen in the past year. We want to see the space grow,” he added. “Evaluating if it&#8217;s real and what we should be working on, we have that big idea in mind: can we get a billion people in the power of cryptography?”&nbsp;



He hinted that only time will tell.