Solana, a blockchain network that rivals Ethereum, went offline for more than 24 hours this weekend, leading to massive losses for its users — a real rotten cherry on top of the melted ice cream sundae that’s the crypto market right now.
What happened: Solana lost credibility and 17% of its token price after its system went offline for over 24 hours, causing severe losses for users during a turbulent weekend of cryptocurrency market madness. The system failure prevented many from adjusting their position, leading to a period of frustration and panic.
- As people watched prices crash, borrowers wanted to increase their collateral and ensure their accounts weren’t liquidated. Being unable to access their accounts resulted in many users defaulting because they couldn’t do so.
- The outage impacted all Solana applications, including FTX, one of the most popular crypto exchanges in the US.
This tweet from Solend, a borrowing and lending protocol built on Solana, summarizes how the bots pulled it off.
Why it matters: This is the protocol’s second major outage since September, and its second outage this month. These disruptions could call into question Solana’s viability as an alternative to Ethereum.
- Solana has been dubbed an “Ethereum Killer” due to its cheaper fees, enterprise blockchain, high speed, scalability and reliability *side eye*.
- In the wake of the outages, one Reddit user compared Solana to McDonald’s soft serve: so good when you can get it, but often unavailable because the machine’s out of service.
With so much money on the line, outages that last a day or two during a market free-fall can wipe out investors and breed skepticism about the technology. The growing doubt about Solana’s reliability is reflected in its plunging token (SOL) price, which now sits at US$85.79, according to CoinGecko.
What’s next: The Solana team says they’ve pushed an update to the blockchain that should resolve the issue but for now investor confidence is shook.