Solana, the third-largest cryptocurrency, fell more than 12% on Wednesday (June 1, 2022). The reason is that its blockchain experienced its second failure in a month.CNBC, June 2, 2022
At around 1 p.m. eastern, the Twitter account Solana status reported the incident. Validators had to restart to fix this latest outage. It was later reported to have lasted four and a half hours by the same Twitter account. As a result, applications developed on Solana’s blockchain have been taken offline.
Solana has gained traction in the NFT and Defi ecosystems in recent years. This is because it is less expensive and faster to use than Ethereum. According to its website, its blockchain processes 50,000 transactions per second. Thus, its average transaction cost is $0.00025. However, Ethereum can only handle about 13 transactions per second. Besides, transaction fees are significantly higher than on Solana.
During last year’s crypto run-up, investors focused on Ethereum began diversifying into Solana and other alternative blockchains. In June 2021, Solana closed a $314 million private token sale led by Andreessen Horowitz and Polychain Capital.
Unfortunately, the blockchain network of Solana has experienced multiple outages over the last year and a half. Most recently, on May 1, 2022, Solana went offline for several hours before being brought back online after its validator network was restarted. Finally, it exposed the trade-off.
To solve the situation, the Solana team has requested that validators restart the network. It has issued validator instructions. It includes taking a snapshot of a specific time slot from which the network can be restarted.
In short, Solana prides itself on being a high-performance blockchain. However, it has experienced numerous outages and blocks congestion in the last year. Finally, this outage leads Solana’s price decrease.
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