Jim Greco, like many traders who have had to deal with Solana’s network outage over the past few days, is upset.
“How can anyone trust Solana Network with real capital after a crash like today?” Greco, a market structure expert and former CEO of KCG, said in a Friday night tweet.
With the price of cryptocurrencies dropping across the board during Friday’s trading session, large and small traders found themselves unable to execute transactions on the Solana blockchain – a protocol touted by proponents of scalability and fast transaction speed. Transactions per second (tps) decreased significantly.
Those cases extended to Saturday. Meanwhile, Solana’s official Twitter account noted that the blockchain “is experiencing high levels of network congestion” linked to “excessive duplicate transactions.”
According to Solana founder Anatoly Yakovenko, bots also appear to be sending duplicate transactions, adding to the problem.
Solana wasn’t the only one experiencing blockchain problems as prices fell. But the network’s problems are brought to the spotlight as it has become the darling of big commerce stores in the cryptocurrency industry and beyond.
Sam Bankman-Fried of FTX is a big supporter and Jump Trading has injected capital into Solana-based projects. According to John D’Antoni of The Block Research, more than 50% of the Jump Crypto protocol’s investments have gone to Solana. environmental system.
Pyth – a data project based on Solana – counts a wide range of market participants as supporters, including IEX, Virtu and GTS. (I’ve also had issues.)
Part of the reason Solana is so attractive to supermarkets is that it prioritizes scale. However, when the network is overcrowded, it has shown that it can crash.
And Solana issued a fix on Saturday to mitigate “the worst effects of this problem,” she said.
“These upcoming releases are aimed at improving the state of the network, with more improvements expected to be rolled out in the next 8-12 weeks,” the developers added. “Many of these features are currently on Testnet, where they are thoroughly tested.”
Solana has a large war fund to tap into to address its problems, having completed a $314.2 million fundraising in June 2021.
The Solana network crisis has had repercussions across the crypto ecosystem. Not only does it make it difficult for a retail market participant, for example, to sell Solana-based NFT, but it also slows down large DeFi traders and forces them to operate across the network. “It slows everything down,” said one business executive.
For large traders moving in the tens of millions, they have to move the activity over-the-counter and agree to a settlement once the chain is up and running. One executive at the Derivatives Trading Desk noted: “Agreed on the price now and settled later…
Other traders have complained about their inability to override Solana’s leverage position in a decentralized location – meaning, adding to their position before risking liquidation.
These complaints raise questions about Solana’s ability to maintain its position as the preferred crypto platform on Wall Street. A company trying to move about hundreds of millions of people might choose to use a different blockchain even if they had to pay exorbitant fees — if they could count on it to operate.
“I don’t care about the price,” Jim Greco said in a letter to The Block. “But I can’t get anything done on the network. How often will this happen at the exact time the network needs the most performance?”
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