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The Solana network crashed for 48 hours, forcing users who had taken loans to liquidate their holdings. These network outages have unfortunately become a regular occurrence for the “Ethereum killer.”
Bots Spam Solana Network
According to early reports, bots had been spamming the Solana network, causing congestion issues over the weekend and leading to a 48-hour shutdown. Most DeFi users were unable to top up their loan collateral, which set in motion a flurry of liquidations. So ultimately, users had to pay the price for Solana’s network instability.
This is the second time this month that the Solana network has faced network issues; however, the previous one did not last as long. According to the data available on the Solana Status website, the partial outage began Friday and lasted 12 hours and 15 minutes, continuing for 17 hours and 7 minutes on Saturday.
The Solana Status Twitter handle also tweeted out the news,
“The current issue experienced by validators is due to excessive duplicate transactions. Engineers have just released 1.8.14, which will attempt to mitigate the worst effects of this issue.”
DeFi Users Pay The Price
It was a rough weekend for Solana DeFi users. The weekend outage was worse than the one in September when the network was out for 18 hours. The price of SOL dropped drastically from $143 to $90 on Saturday and is currently valued at $84.49 at the time of writing. The drop in price severely affected many DeFi users who had taken out loans. Users on DeFi lending protocols like Solana need to provide collateral with a base asset of SOL as collateral against defaulting. This is why, during market meltdowns, when the value of SOL drops drastically, they need to top up their collateral to avoid falling below a certain threshold, which could lead to liquidation.
Solana’s cheap and fast transactions have always drawn in bots, DeFi borrowers, and other users to flood the network with transactions. Bots have attacked the network in the past as well. However, this time, liquidators could successfully flood the network with their transactions. Despite the issue being quickly resolved, the network was down the entire weekend. Soon after, the Solana blockchain was updated to version 1.8.14.
Solana Critics Vocal
The outage is causing individuals and experts in the crypto community to question the viability of the supposed Ethereum-killer.
Tech investor Daniel Cheung tweeted,
“Solana being down for 48 hours multiple times now makes me question the viability of a monolithic structure. It’s clear the winning blockchain of the future will likely be one with a modular architecture.”
According to renowned author and crypto enthusiast Mark Jeffrey,
“Another day, another 48 hour Solana outage. This is like the sixth time this has happened in 3 months. I have zero faith in it now. It is the new EOS. The fight is now between ETH, BSC, Fantom, Avalanche, and Terra.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.