Solana Grinds to a Halt?: Why did it happen?
Yesterday, Solana ground to a halt. Reportedly, a hack may have the disruption.
The ETH killers are dead, long live Ethereum? Not quite. Solana may have ground to a halt yesterday, but any sort of maximalism is still reductive and misses the big picture. Furthermore, all crypto networks will experience issues, of varying magnitudes. Through briefly unpacking Solana’s stoppage yesterday, I hope to illuminate for you, just how likely such an event can be, given the right parameters.
Before We Get There: Other Recent Events
Though other networks have experienced recent slowdowns/stoppages, I’m not here to engage in “whataboutism,” as others have been doing on Twitter. Instead, I’ll focus on the facts surrounding what happened with Solana, which you can continue with below!
What really happened with Solana?
Yesterday, the Solana Foundation Twitter, Solana Status, reported “Solana mainnet-beta is experiencing intermittent instability. This began approximately 45 minutes ago, and engineers are investigating the issue. Resource exhaustion in the network is causing a denial of service, engineers are working towards a resolution. Validators are preparing for a potential restart if necessary.”
If we unpack this statement, there’s two major points to keep in mind.
First, Solana is effectively still in a beta. Slowdowns and even stoppages will happen with apps, services, and even crypto networks, especially when they’re still in-beta, which by definition, is the state in which the kinks are worked out in a live fashion. Second, according to Decrypt, “resource exhaustion,” refers to a Solana-based project that sent a large number of transactions to the Solana chain in a short amount of time for an IDO, or “Initial Decentralized Exchange Offering.” Decrypt’s Andrew Hayward reported that according to Solana’s Anatoly Yakovenko(the CEO of the Solana Foundation), “bots from the IDO in question were flooding the Solana chain with 300,000 transactions per second,” which ground Solana to a halt.
When you consider that even Solana’s theoretical TPS(transactions per second) ceiling is 50,000, then it’s easy to see why this happened. 300,000 is 6x that.
So how were bots from one fundraising effort able to generate an average TPS that Solana couldn’t support? In the end, speaking for the Solana developer community, Yakovenko chalked it up to bugs in the Solana code that were already being worked out.
Only time will tell what more information we’ll get as these events unravel but one thing is sure. A beta is a beta, and events like this should be expected. It doesn’t mean Solana is dead.
Looking Ahead: What’s Next?
The recent events surrounding Solana should remind us all that above all, it’s early for crypto and even earlier for projects like Solana that effectively represent niche chains improving upon more established models. I remain a fan of all of the effort behind Solana and similar projects and simply want to open your eyes to just how risky investing any sort of resources in crypto’s newcomers can be.
Bide your time, do careful research and be wary that events like those of this week will continue to happen as such networks grow. Yes, some of the recent growth surrounding Solana could have been driven by its’ technical differentiators and network effects, but it’s also likely that a large part of it was driven by simple, behavioral economics.
That’s not a bad thing at face value, but it could pay to be skeptical any time an asset experiences an exponential rally and it’s very new to the market it’s a part of.
In the end, slow and steady and zooming out to look more long-term seem to still be the consensus for all crypto investors, as evidenced by timeless statements from Raoul Pal, Anthony Pompliano, and many others who have experienced numerous crypto waves.
Let me say it one more time, in an even simpler sense.
If you take the stock market model of investing, with crypto, it pays to look at the forest, instead of focusing on the individual trees. Metrics like long-term ROI of leading crypto assets lend evidence to this being a useful strategy, again, as pointed out by leading, accomplished crypto investors and more importantly, the markets themselves.
In the end, however, investing in crypto is just as uncertain as investing in startups, if not more so.
Stay safe out there and as always, I hope you learned something.
With everything that I do, I aim to spark further, deeper conversations and simply help to educate the world about the power of this little, yet powerful place many of us have now called home for years. Now, I’m moving to an even shorter format for some of my work because, honestly, we live in an age where no one has time for anything.
For now, I’ll leave you with this question: what do you think needs to be done to shore up Solana’s defenses?
As always, feel free to reach out to me about your answer and more via Twitter or Discord@AriastheRaven#0117, and stay tuned for next time! Finally, most of my free time is now being taken up with my newsletter, which is completely free and focused on how the rise of the Metaverse improves things for everyone. Sub here.
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Disclaimer: I do not aim to garner any investment for the project from my efforts and no one should make any investment decisions based on what I write. All of my content is purely educational. Do not treat this post as an inducement to buy SOL(Solana’s native coin), which I do not personally own at this time. In a day and age where you can never tell who isn’t just shilling their personal portfolios, this has to be said. Always do your own research before you put any financial resources on the line for anything.
P.S.: As I’ve stated time and time again on Twitter, I’m a pluralist. That means I believe in a many chain future, and I’ll never be a maxi of anything, including Solana.
