The early days woes for Solana continue. it is important to note all blockchains had similar issues in their early days, including Ethereum. SOL market cap has gone up too high too soon so now it seems harsh reality is kicking in. Blockchains have scalability issues and low fees also have their drawbacks; users complain about Ethereum high fees but high fees mean users think twice about it before transacting, with low fee blockchains, even in stress type situations like this weekend, users continue to do ‘less essential’ transactions , and the result is a network that gets very congested very fast. This results in the important transactions, like covering positions which can liquidate portfolios on DeFi platforms , not going through.
These past few days have been brutal for Solana. The beginning of the weekend saw the market value drop heavily from $200 late December to a bit over $90 Jan.22,2022 and currently at a little more than $102.
The recent meltdown of Solana isn’t isolated as most all altcoins, Ethereum, and Bitcoin have taken a plunge over this weekend that seems to just be trudging along for investors. Though the drop in price is not isolated Solana’s issues with slowdowns, delays and DDoS attacks have undermined it’s initial promises of success and efficiency.
It’s About Trust
Many traders are questioning how Solana can be trusted after the massive meltdown that was this past Friday and Saturday.With the drop in price on Solana many traders that tried to soften the blow by selling or transferring their coins found it quite difficult to do so, transactions were slow or nonexistent which goes against everything promised about speed of transactions.
These issues started Friday and poured over into Saturday which saw Solana take an even bigger dive into double digit territory. Anatoly the founder of Solana on the official Solana twitter stated that there were too many bots sending duplicate transactions and adding to the problem.
some recent metrics on the solana TPS. Number of duplicate packets is too damn high! (and take way to long to check and after sigverify)— anat◎ly 🦀🤿🏒 🤙 (@aeyakovenko) January 21, 2022
huge thanks to @buffalu__ on finding this issue.
pre fix: pic.twitter.com/fQ5PA1Eefi
As stated before Solana was not the only blockchain to suffer losses during the weekend but the mass adoption lately of Solana and the constant network slowdowns have made the issue at Solana all the more daunting. FTX Sam Bankman-Fried is a backer and so is Jump Trading as according to The Block Research’s John Dantoni, there is more than 50% of Jump’s investment portfolio in Solana.
Solana has been promoted to to prioritize scale but stalling out has been an issue with the network getting congested. Solana has released a fix on Saturday to help with some of those issues to make sure it does not get any worse.
The prices may be down across the board and some analyists state Solana may be headed towards the original double digits but with the scalabilty, potential growth of the blockchain, and many more amazing projects on the horizon there is no need to worry too much about the future of this young blockchain.