Solana suffers second network outage this year amidst brutal crypto market correction

Source : crypto-news-flash.com

  • For about 30 hours on Jan. 21-22, Solana suffered network instability and outage due to liquidation and arbitration bots.
  • SOL shed 36 percent as a result as doubt loomed over the network’s reliability.

Yet again, the Solana (SOL) network has suffered another network instability and outage – the second this January and the fourth in six months. 

According to Solend, the network’s autonomous interest rate machine, the latest event lasted 30 hours between Jan. 21-22. Part of the post-mortem reads:

There were many failed attempts at depositing and repaying, which made it difficult for users to save their accounts from being liquidated.

Additionally, volatility on price feeds led to “wrongful liquidations.”

Solend attributes the outage to liquidation and arbitration bots, which found great opportunity in the recent market crash.

Liquidation and arbitrage bots began submitting a high volume of transactions to win liquidations and trades.

Related: Bank of America expects Solana to become the ‘Visa of crypto’

Solana suffers the latest outage on account of bots

The bots took advantage of the network’s cheap transactions, in addition to the high profitability of successful arbitrages. Thousands of duplicate transactions caused validator failure due to lack of filtering, and a stifling of legitimate user transactions. The situation was exacerbated by ‘staleness’ in pricing oracles, increasing the number of failed transactions.

In an effort to restore network functionality, engineers made a few tweaks to the system and released version 1.8.14. Additionally, Solana assured users a 50 percent reimbursement of the liquidation penalty for those liquidated during the incident. Meanwhile, those affected by abnormal volatility would receive 100 percent reimbursement.

Solana users took to Twitter to vent their frustrations despite the network being billed as a potential “Ethereum killer.” The network boasts of better attributes than rival Ethereum in terms of scalability, transaction speed, and gas fees among others. A recent report by JPMorgan showed that Solana was gradually pushing Ethereum out of its role in DeFi and NFTs. 

History repeats itself

However, the constant series of outages does a number on Solana’s reliability and does not bode well for its future. Solana once reigned among institutional investors, but their wariness of the network is likely on the rise.

As the year began, the network suffered its third outage in six months due to a Distributed Denial of Service Attack (DDoS). In mid-December, the outage was caused by network congestion following the launch of a new NFT collection. And in September Solana went down for 16 hours due to transaction overload.

What’s more, the Solana team has said there are probabilities of a similar outage, saying it may happen “at least once.”

SOL dumped 36 percent value owing to the recent outage. At press time, it was trading at $85.26, down another 16.3 percent in the day. The coin has also shed 65.8 percent from its Nov. 6 all-time high of $260. SOL is currently surpassed by Cardano (ADA), XRP and USDC where it once led by market cap.

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