Down 67% From ATH: Solana Suffers A 48-Hour Network Outage

Crashing for 48 hours, the Solana network outage even impelled users who had taken loans to liquidate their holdings this time around. Solana, one of the largest blockchain networks popularly known as the “Ethereum-killer”, has regrettably had multiple instances of such network instabilities over the past year.

Losing two-thirds of its value from its peak of $260 reached last November, the digital token has also slipped down to the eighth spot among the largest crypto tokens from its fifth position earlier.

Congestion Issues From Bots Spam

As per Crypto Daily, bots had been spamming the Solana network, causing congestion issues over the weekend and leading to a 48-hour shutdown. Most Defi users were unable to top up their loan collateral, consequently setting off a flurry of liquidations. In this manner, several users paid the price for Solana’s network instability during this period.

Solana Status tweeted out a notice addressing this too, stating that “The current issue experienced by validators is due to excessive duplicate transactions”; Engineers have released version 1.8.14, which “will attempt to mitigate the worst effects of this issue”, it said. This marks the second time that Solana has hit this speedbump on its network (check out more on other network issues faced by the blockchain network, click here).

DeFi Users At A Loss

Facing a longer outage than the one it did in September (which went on for 18 hours), SOL prices were drastically affected by this all. SOL went from $143 to $90 on Saturday, it is currently valued at $89.56 at the time of publishing. 

This loss in value has critically affected users who took out loans. Users on DeFi lending protocols like Solana need to provide collateral with a base asset of SOL as collateral against defaulting: CryptoDaily notes. Therefore, during times when SOL’s price drops significantly, they require to top up their collateral to avoid falling below a certain threshold, which could result in liquidation. 

Soon after the incident was resolved, the Solana blockchain updated to version 1.8.14.

Critical Evaluations By Figures In The Crypto Circle

Numerous investors and crypto enthusiasts have expressed their dissatisfaction with Solana’s network performance over the past few months, with the crypto losing its mojo as the Ethereum-killer in recent times.

Famed tech investor Daniel Cheung tweeted, “Solana being down for 48 hours multiple times now makes me question the viability of a monolithic structure. It’s clear the winning blockchain of the future will likely be one with a modular architecture.”  

“Another day, another 48 hour Solana outage. This is like the sixth time this has happened in 3 months. I have zero faith in it now. It is the new EOS. The fight is now between ETH, BSC, Fantom, Avalanche, and Terra,” Mark Jeffrey, an author actively engaged in the crypto community commented.

Even Shivam Thakral, CEO of BuyUcoin, a homegrown cryptocurrency exchange pointed out that the matter may have gotten resolved on Sunday “but the damage was already done” as Solana face heavy liquidations.

Sneh Dokania is an Economics major student with an inquisitive disposition seeking to articulate facts, information and news stories in a candid manner on Clout News.

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