Market Meltdown: Solana Suffers Network Outage

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Last Updated December 22nd 2022
4 Min Read

Solana is attempting to address a number of market issues that have been identified. For instance, the architecture of the network was designed to be scalable and resistant to censorship. By using this approach, this trustless and distributed blockchain addresses both transaction settlement speed and bandwidth issues.


What Makes Solana Different From The Rest

Solana is an exceptionally adaptable decentralised blockchain created with an interesting technique for requesting exchanges that essentially further develops its exchange throughput to the point that it has reliably been handling 2,500 transactions each second.

The Volatility Of The Market

Traders will be able to profit by buying low and selling high at the proper moment if they can figure out the price movement pattern. However, despite the fact that the science of interpreting a coin price chart may be known, this process may still be rather difficult owing to the presence of too many factors impacting crypto prices.

If you've ever looked at a real-time crypto trading chart, you've definitely noticed how rapidly prices may fluctuate in reaction to market circumstances. This circumstance is referred to as "volatility." Sometimes sudden price changes may lead you to profit much more than you would with a more traditional asset.

However, that’s a double-edged sword. As phrased it, “success is never guaranteed due to the market's volatility” As a result, you need to understand factors contributing to volatility and always be on the lookout for trouble when trading crypto, regardless of what coin you have your eye on.


High Level Of Network Congestion And Network Outage

According to an independent lending protocol for Solana named Solend, the blockchain network experienced organisation over-burden because of bots spamming the network throughout the end of the week. Tragically, Solana network clients who took advances with collateralized resources like SOL from loaning services like Solend couldn't save their resources during the total market implosion as the blockchain battled with congestion. An enormous liquidation, no matter how you look at it, occurred straightaway, and clients were left counting their misfortunes.

The issue seems to have persisted for over 30 hours, concerning investors deeply. Solana, one of the biggest existing blockchain networks and regularly promoted "Ethereum killer," seemed to have faced one more excessive traffic jam that harmonised with the more extensive crypto market, forestalling decentralised money (DeFi) clients from boosting their credit insurance, causing a whirlwind of liquidations.


The Network Outage Of Solana Proves Its Scalability

As the network's congestion increased, top currencies like Bitcoin and Ethereum had to raise their transaction fees. Unfortunately, both of these networks have been plagued by serious difficulties as a result.

The crypto market continues to be troubled by scalability concerns. Due to the early blockchains’ reliance on the Proof-of-Work consensus mechanism, there was a lot of congestion in older blockchains.

In addition, with the recent growth in DeFi platforms, Ethereum is being saturated with new initiatives. Unfortunately, for the common user, this congestion means increased costs and transaction delays.


Solana Is Still The Fastest Cryptocurrency In The Market

One of the biggest advantages of Solana is that it can process around 50,000 trades each second (TPS). To place that in context, Ethereum processes somewhere in the range of 15 and 45 TPS; however, the impending move up to Ethereum 2.0 will make it much faster — when it happens.

Speed isn't all that matters; however, scarcely any other blockchains can rival Solana in this regard. What's also interesting is that Visa says it processes around 24,000 TPS, meaning Solana could make life surprisingly difficult for existing payment organisations.


Should We Worry About The Network Outage?

The organisation depends on the Solana Foundation to foster centre hubs on the blockchain, while networks like Ethereum have a few centre hub engineers. While anybody can turn into a validator on Solana, running a hub can be costly as a result of the organisation's high energy demands. Besides, the recent blackouts have been connected to worries over the centralization of Solana.

The Solana network blackout at the end of the week occurred at one of the most unfortunate moments for the crypto market. Costs dunked in bright red, liquidation was in sight, and clients were searching for ways to save their crypto balance and minimise the fallout from the event.

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