Solana’s newest outage incites recent centralization criticism 

Solana’s native token, SOL, tumbled from $96.43 to $93.36 through the blip, though it has since recovered that loss, in response to CoinGecko knowledge. In the meantime, transactions on the community floor to a halt.

The outage got here after a cluster halted and required a system restart, in response to Austin Federa, Head of Technique, Solana Basis. The foundation trigger is but to be recognized.

With its excessive pace and low charges, Solana has change into a number one “Layer 1” blockchain competitors lately, and has been undergoing a recent boom that outpaces the business’s current bullish trajectory, climbing over 400% in 2023, and turning into the fifth-biggest token. By comparability, ETH, rose by a modest 66% final 12 months.

The newest hiccup raises questions, nonetheless, about whether or not Solana has the technical basis to outpace its rival, and if it will possibly obtain the type of decentralized infrastructure which have made Bitcoin and Ethereum the business’s main blockchains.

“People want to have ETH killer — it’s a fun narrative,” mentioned Ernst & Younger’s world blockchain chief, Paul Brody. “But I think [the outage] does raise doubts,” he added, hinting that the incident supplied an “I-told-you-so” second for decentralization advocates.

Centralization skeptics

The outage has ripened criticism by those that imagine the network’s centralized structure is at odds with crypto’s final promise: management must be distributed amongst a community, fairly than a person, group or group. 

“True blockchain developers who care about decentralization have tended to steer somewhat clear of Solana,” mentioned Brody. 

If it’s a software program bug that’s been propagated via the community, an outage will come up when there’s a single level of failure, and sometimes a single entity is accountable for fixing it, he mentioned.

Brody, who has written a e book on Ethereum, sees outages as a “real struggle for Solana,” and says Tuesday’s lapse makes the previous, which has not skilled related such issues, look enticing as compared.

Is that this the “ETH Killer”?

Solana down for nearly 2 hours 🤣 pic.twitter.com/XMzXSlyygh

— Harry 🔺 (@0xHarryJohnson) February 6, 2024

Laurence Smith, a senior market strategist at blockchain ConsenSys (based by rival Ethereum’s co-creator Joseph Lubin), acknowledges Solana’s worth and pace benefits, however sees the outage as a reminder of centralization’s downsides.

“The centralization risk is that one party controls everything — such as when you turn it on or off,” he informed Fortune. For him, the Tuesday underscores his hesitations concerning the community: “Is it truly in line with decentralization?”

Continual outages 

Community failures have lengthy plagued Solana. 

The community underwent a 18-hour blackout in September 2021. The following 12 months, it confronted 14 additional outages, resulting in a complete downtime of 4 days 12 hours 21 minutes, in response to the corporate’s uptime tracker, attributable to a mix of congestion and a sequence of bugs. 

Throughout one significantly extreme blackout in January final 12 months, the community confronted an outage that lasted for over 24 hours, triggering the liquidation of a number of merchants’ SOL tokens.

Solana Labs’ CEO Anatoly Yakovenko was compelled to acknowledge the problem at Breakpoint, its annual 2022 convention, saying “I would say this whole last year has been all about reliability for the Solana engineering team. And a lot of that, I think we’ve solved.”

However even after this acknowledgement of fallibility, in April 2023, a two-day blackout was triggered by extreme reminiscence consumption that required a posh restart. 

Solana’s resurgence 

Whereas SOL could also be booming, the outage comes at a fragile time for Solana Labs’ fame.

That’s as a result of disgraced FTX founder Sam Bankman-Fried, accountable for “one of the biggest financial frauds in American history” was an advocate for Solana, investing in over 55.8 million SOL tokens, valued at $5.3 billion as of Tuesday, and constructed a decentralized alternate on the blockchain known as Serum, which was partially to thank for the SOL spike of 2021. 

Bankman-Fried’s subsequent downfall in November 2022 hit Solana significantly exhausting, making buyers reluctant to again a blockchain that he had so vocally endorsed. Through the FTX debacle, SOL’s worth fell to only $9.60 by the top of 2022, falling from its all-time excessive of $259.24 in 2021.

Reflecting on watching SOL tumble and the business lose belief within the community, Yakovenko informed Cointelegraph final 12 months: “I was more worried about the ecosystem of startups; we didn’t know how exposed teams were.”