Solana has since had more breakdowns than any of its rivals. It is therefore not surprising that questions are being asked about the reliability of the network.
Yet another network failure
On January 23, Solend, published a report detailing the latest network outage. Solana was hit by network instability and nearly 30 hours of power outages on Jan. 21 and 22, according to the network health reporter. It’s the second network outage this month after service outages and decreased performance between January 6-12. The report stated the following:
“There were many failed deposit and refund attempts. This made it difficult for users to avoid having their accounts liquidated.”
It added that there was some volatility on price feeds causing “illegitimate liquidations.”
Can Solana really compete with other major blockchains?
The main cause of the latest outage was the market crash that Solend said created arbitrage opportunities.
“Liquidation and arbitration bots started submitting a large number of trades in an effort to win liquidations and trades.”
Bots started spamming the network because the trades were cheap and the profitability of a successful arbitrage was high. This heavy load caused validators to falter because they failed to filter out duplicate transactions. “The thousands of duplicate bot transactions also drowned out legitimate user transactions,” it added.
Oracle feed prices could not be updated. Some of these were “outdated for hours,” Solend said. It stated that outdated price feeds also exacerbated the number of failed trades.
A few adjustments have been made to the system to restore network functionality. Engineers have released version 1.8.14 to mitigate the worst impact of the issue. Solend stated that the users liquidated during the incident will be reimbursed 50% of the liquidation fine. For those affected by abnormal volatility on the SOL feed, 100% will be reimbursed.
On twitter came the usual deluge of criticism of Solana, who repeatedly claimed to be superior to Ethereum in terms of performance.
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Previous failures
In mid-December, Solana experienced a similar outage, resulting in network congestion from a newly launched NFT collection. Three months earlier, in September, Solana was again offline for 16 hours due to a transaction overload.
Four outages in four months doesn’t bode well for Solana’s mainstream adoption. In addition, the Solend team did not rule out more failures:
“It’s unfortunate that these issues have happened and while we hope it doesn’t happen again, there’s a good chance we’ll face similar issues at least once.”
SOL . price drop
The Solana price has fallen extremely hard in the past week. The SOL price dropped 36% during the outage and the price fall certainly doesn’t seem to be over yet. SOL is currently trading at $84. That is the lowest price since August 2021.
Solana is already under XRP, ADA and USDC. SOL is currently down 65.8% from its all-time high of $260 on November 6.