Solana downtime for 30 hours, TVL on the chain dropped to 6th place

From January 21 to 22, the crypto asset market experienced a sharp decline, with BTC and ETH falling by 23.78% and 33.7% respectively. As a result, the value on the chain was liquidated on a large scale, creating arbitrage opportunities, and various blockchain networks were more congested than usual.

Among all the public chains, Solana was pushed to the forefront due to a 30-hour downtime. According to subsequent reports, the reason for the network outage was that the collapse of the crypto asset market created a large number of arbitrage opportunities, and liquidation and arbitrage robots submitted a large number of transactions, causing the network to be severely loaded.

On January 23, the network gradually returned to normal, but the outage had a significant negative impact on Solana. In fact, in the past few months, Solana, known as "high performance", has experienced outages and network congestion many times. Last September, Solana was down for 17 hours due to insufficient validator memory; in December last year and January this year, it suffered DDoS attacks, resulting in network congestion.

Insufficient network performance and stability have begun to put Solana at a disadvantage in the competition among public chains. According to data from Defi Llama on January 25, the TVL (total locked value) on the Solana chain has dropped to US$7.52 billion. In the past month, its TVL has decreased by 38.62%, which has caused its TVL ranking in the public chain sector to drop from third to sixth, the largest drop among the top 10 public chains.

In the secondary market, Solana's native token SOL has fallen from its historical high of $259.69 to $91, a drop of 65%, the largest drop among all emerging public chains. In the fiercely competitive public chain market, Solana is experiencing development pains.

Solana network outage caused by massive liquidation for 30 hours

The Solana public chain, which features high TPS (transactions per second) as its main highlight, has once again fallen into the trouble of downtime.

During the crypto asset market decline from January 21 to 22, the Solana network experienced the largest network outage in history. Not only were users unable to complete on-chain operations immediately, but some project parties were also affected when deploying on-chain contracts. The outage lasted nearly 30 hours, exposing the shortcomings of the emerging public chain network in terms of performance and stability.

On January 23, Chase Barker, head of developer relations at SolanaLabs, tweeted that Solana has released a new version with performance optimizations. As more validators begin to upgrade, performance should continue to improve.

On January 24, Solana's ecological lending protocol Solend released a network outage analysis report. It is reported that the root cause of this network outage is that the collapse of the crypto asset market has created a large number of arbitrage opportunities, so liquidation robots and arbitrage robots continue to submit a large number of transactions to quickly complete liquidation and transactions. As a result, a large amount of spam was sent to the Solana network, causing serious load.

Between January 21 and 22, BTC fell from $43,300 to $33,000, a drop of 23.78%, and ETH fell from $3,260 to $2,160, a drop of 33.7%. Affected by the market, the crypto assets on the chain also suffered large-scale liquidation, and Solana's performance faced challenges.

The report released by Solend also mentioned that there are some problems with the Solana blockchain itself, such as its network’s inability to filter duplicate transactions, resulting in thousands of robot duplicate transactions overwhelming normal user transactions.

In the Solana community and on social media, many users complained about network freezes and service interruptions. Some said that transactions on the network often took much longer than normal to complete, or simply failed.

This major outage has attracted the attention of the Solana official team. Although Anatoly Yakovenko, co-founder of the public chain, disputed the claim that the network was paralyzed, he admitted that "the user experience should not be what it is today."

He believes that network congestion is related to the increasingly complex nature of transactions. As Solana's DeFi market grows, more and more users are submitting compound transactions that require additional resources. For example, a user may borrow from the lending protocol Solend and then use Raydium's automatic market maker. As these complex transactions increase, Solana validators are struggling to meet user needs. "The network is experiencing growing pains."

On January 25, Solana's network problems were basically resolved. The on-chain automation platform Snowflake Network stated that after the collaborative repair work of the Solana Labs team and the validator community, the newly released Solana mainnet v1.8.14 version has solved the network congestion problem caused by arbitrage robot spam.

Solana drops to sixth on-chain TVL

Although Solana’s outage problem has been fixed, repeated network outages or congestion have caused this public chain, which has always been known for its high performance, to be questioned.

Last September, Solana experienced a 17-hour outage, which the public chain attributed to the overflow of robot transactions after the launch of the initial decentralized trading product by the on-chain DEX Raydium. Solana said that resource-intensive blocks caused validators to run out of memory, causing the network to fail. Network engineers then initiated a hard fork with more than 1,000 validators, which was approved by 80% of stakeholders.

On the day of the outage, Solana’s native token SOL fell by more than 13%.

On December 9, Solana failed again, and the network's transaction processing speed became very slow. It was later found that the public chain suffered a DDoS attack (distributed denial of service attack). In early January of this year, Solana's network performance was once again degraded due to a DDoS attack.

In the early days of the Solana mainnet, it repeatedly advertised that its TPS could reach 50,000, which was the highest on-chain transaction processing capacity among all blockchains. In the early stages of its ecological development, due to the small number of on-chain projects and users, Solana did demonstrate efficient on-chain processing speed, but as the ecosystem continued to expand, on-chain congestion and slow transactions gradually became the norm. According to developers' observations, when there are too many on-chain transactions, Solana's TPS will drop to four-digit levels.

If network congestion occurs on Ethereum, it will not cause people to be surprised, but when Solana is repeatedly congested or even shut down, its biggest advantage begins to be questioned. Some on-chain users believe that Solana’s network stability is insufficient, causing it to gradually slip in the competition with a number of emerging public chains.

On-chain data reflects Solana's declining performance in recent months. Data from Defi Llama on January 25 showed that Solana's on-chain TVL (total locked value) has dropped to $7.52 billion, ranking sixth in the public chain ranking. In the past month, its TVL has decreased by 38.62%, the largest drop among the top ten public chains.

In mid-November last year, Solana’s TVL exceeded $12 billion, ranking third among all public chains, second only to Ethereum and BSC. Today, it has been overtaken by Terra, Fantom, and Avalanche.

Solana TVL drops to 6th place in the public chain sector

Affected by the decline in on-chain value, SOL also suffered a sell-off in the secondary market. As of January 25, SOL has fallen from its historical high of $259.69 to $91, a drop of 65%. In contrast, Fantom's native token FTM has fallen by 34% from its peak, and Avalanche's ecological token AVAX has fallen by 57% from its peak.

After experiencing rapid ecological growth, Solana gradually exposed problems of insufficient performance and stability, forcing it to slow down its development. For Solana, while continuing to expand its on-chain ecology, it obviously needs to ensure network stability in order to gradually regain trust.