Solana falls 77% in 2022 as blockchain outages deter investors

Solana falls 77% in 2022 as blockchain outages deter investors
4 months ago
2 mins read

Solana (SOL), the smart contract functionality blockchain also dubbed as ‘Ethereum killer’, has extended losses in 2022, with the network experiencing recurrent outages in recent months. 

Solana began 2022 trading at $173 but has since recorded a year-to-date (YTD) drop of about 77%, trading at $39 by press time. Notably, Solana’s YTD plunge is double that of Bitcoin

Solana YTD price chart. Source: CoinMarketCap

Meanwhile, over the last 24 hours, the token plunged by over 11% in the wake of another wide-scale outage where validators on the network could not process new blocks for several hours.

Solana confirms outage 

The outage was confirmed by Solana Labs co-founder Anatoly Yakovenko who stated the issue was due to a durable transaction nonce that affected the blockchain’s ability to process transactions designed for offline use-cases.

According to Solana, durable transaction nonce is a mechanism meant to address the short lifetime of a transaction block hash. 

“Durable nonce instruction caused part of the network to consider the block is invalid, no consensus could be formed,” said Yakovenko. 

To fix the bug, validators restarted the network by disabling durable nonce transactions with the outage lasting over four hours. 

Solana’s history of outages 

One of the recent significant Solana outages was on May 1, when the network went offline for several hours before validators on the blockchain were restarted. Other notable large-scale outages were recorded on April 30, while in January this year, the network was hit with at least nine partial downtimes.

Solana network status chart. Source: Status.Solana.com

According to Finbold’s report, the Solana team verified another downtime that lasted for about two days in January. Developers stated that the outage was caused by an overload on the network due to the flooding of bots on the blockchain throughout the blackout.

Ultimately, the outages have cast doubt on Solana’s standing as a high-performance network designed to complete speedy transactions. 

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Justinas Baltrusaitis

Justin crafts insightful data-driven stories on finance, banking, and digital assets. His reports were cited by many influential outlets globally like Forbes, Financial Times, CNBC, Bloomberg, Business Insider, Nasdaq.com, Investing.com, Reuters, among others.