Like most new-age networks, Solana was developed to resolve major issues confronting the blockchain industry. While the network has addressed some of these issues by its very nature, it has also encountered a few unique problems.
From resource exhaustion to a halt in block confirmation, the Solana network has suffered a number of setbacks that resulted in repeated power outages, causing the network to shut down for hours on several occasions.
The network went down on December 4, 2020, about three years after Solana was introduced, causing confusion in the community.
The chain appears to have stopped validating new blocks at slot 53,180,900, preventing transaction confirmations. The network engineers discovered and fixed the problem, but it had been down for approximately six hours.
Furthermore, on September 14, 2021, the official Solana Support Twitter handle revealed that the network had been experiencing “intermittent instability” for approximately 45 minutes.
According to the report, resource exhaustion was a likely cause of the issue that resulted in a denial of service. According to the support handle, the engineers were working on the issue and looking into the possibility of a restart if it persisted.
The network recently experienced another outage, making it the seventh time that it has been disrupted. This time, the problem was caused by bots initiating a large number of transactions on Metaplex, a nonfungible token (NFT) marketplace built on Solana. The outage lasted approximately seven hours.
Currently, the Solana validators are being slowed down, according to George Harrap, co-founder of Step Finance — a Solana portfolio manager — because bots are spamming NFT mint and arbitrage transactions. These have immense bandwidth requirements, so a significant number has an impact.
“Solana is not a centralized entity with one person who can make decisions. It’s up to the 1700+ validators to decide what to do. Many of them are implementing fixes and reaching consensus on what is to be done in the best interests of the network,” Harrap told Cointelegraph. He said:
“According to Nansen research, there are often 10-times more transactions on Solana than Ethereum. This means Solana is dealing with demands not faced by other blockchains and this is new territory. So, hiccups are expected.”
While Ethereum’s OpenSea has been one of the most well-known NFT marketplaces thus far, Metaplex, built on the Solana network, is gradually gaining traction and allowing users to mint and sell NFTs on the Solana blockchain.
Given the recent marketplace issue and Solana’s persistent blackouts, however, it would not be surprising if some users begin to reconsider.
Harrap added that “there are currently some validator node updates in the pipeline and under research to fix this. This is mainly in the form of new communication protocols between nodes (like QUIC) and changes to the Candy Machine contract used by NFT minters where failed transactions incur a fee.”
Solana seeks to address the blockchain trilemma
Solana went fully operational two years ago. The network is considered to be one of the Ethereum killers by the crypto community. These Ethereum killers are networks that aim to outperform the Ethereum blockchain in terms of adoption by addressing some issues that have arisen as a result of the Ethereum blockchain’s current heavy reliance on the proof-of-work (PoW) consensus mechanism.
Solana was designed with the blockchain trilemma in mind, a concept proposed by Vitalik Buterin, a Canadian-Russian programmer and co-founder of Ethereum.
According to the blockchain trilemma, while decentralization, security and scalability are the three main features of a successful blockchain, a typical blockchain would only be able to provide two of them while sacrificing one.
The Solana network aims to address this by incorporating a proof-of-history (PoH) mechanism into a proof-of-stake (PoS) blockchain. With PoH, the network delegates a central node to determine a transaction time that the entire network can agree on. This speeds up transactions, but it sacrifices decentralization, which is a key feature of a blockchain.
According to Hisham Khan, founder and CEO of Aldrin, users have turned to layer 2s and other layer 1s like Avalanche as well as temporary solutions to Ethereum. But, it doesn’t really solve the current scalability issues, transaction costs and speed. He told Cointelegraph:
“If you look at the transactions per second, Solana ranks consistently in the top five. To gauge how promising an ecosystem is, look at the number of developers. Unsurprisingly, Solana continues to grow with the most developers joining.”
“Scalability and stress tests are a necessary part of the process to shape the ecosystem to maturity — we are not just dealing with financial transactions but initial DEX offerings, NFTs, bots and much more,” Khan said, “All these issues might not exist in five years. And, just like the early days of the internet, the user experience and backend still have room for improvement. While users may not notice the difference, there will be a smoother process as underlying smart contracts and technology continues to be developed.”
Concerns have been raised about whether the Solana network is truly decentralized. While most crypto enthusiasts acknowledge the network’s low fees and notable scalability, they argue that the network is not completely decentralized, citing its reliance on PoH, nearly 50% token allocation to insiders and reliance on the Solana Foundation for core node development.
And, despite all this, its scalability still appears to be in doubt. In early January 2021, the official Solana Support Twitter page acknowledged a decrease in performance, which translates to a decrease in transaction throughput across the network. According to the tweet, the network capacity was reduced to “several thousand transactions per second,” causing some users’ transactions to fail.
Solana employs the proof-of-stake mechanism, which means that users can stake their native coin Solana (SOL) in the pool to earn rewards. These coins are then commissioned to validators in order to increase their polling influence in the blockchain consensus. This quickly confirms the transaction sequence produced by the ongoing PoH generator, selects new PoH generators and penalizes mischievous validators.
While many users have taken advantage of the Solana staking opportunity, particularly as a side income source, a few users on the official Solana Reddit channel have reported issues staking their SOL using Moonlet wallet and Solana’s Phantom wallet.
A long way to go
The Solana ecosystem has produced a number of decentralized applications (DApps), including lending protocols such as Apricot Finance and Francium, decentralized finance (DeFi) projects such as Orca, Saber, and Raydium, NFT marketplaces such as Metaplex and Solanart and Web3 apps such as Audius and the Brave Browser.
However, with only 71 projects, the ecosystem falls far short of major ecosystems such as Ethereum’s, which has approximately 3,249 projects.
Orca, a decentralized exchange on the Solana blockchain, has been the most used DApp on the Solana ecosystem in the last seven days. Orca has a user base of 272,000 people, while NFT Marketplace Magic Eden comes in second place with 121,000 users.
In contrast, while the most popular DApp on the Ethereum ecosystem in the last seven days has been NFT Marketplace OpenSea with approximately 148,000 users, the Ethereum ecosystem’s total value locked (TVL) is far above its rival’s with a value of $113 billion, according to DeFi TVL aggregator platform DeFiLlama. Solana has a TVL of $6 billion.
The low fees that the Solana network promises have enticed developers and users alike, but frequent network outages have hampered full network utilization and scared away some potential stakeholders that have stunted the ecosystem’s growth.
Promising upgrades ahead
In response to these concerns, Solana Labs — the technology firm behind the Solana blockchain — has revealed plans for “flow control” upgrades that will potentially address these growing network outage concerns.
Austin Federa, head of communications of Solana Labs, hosted CEO Anatoly Yakovenko and other members of the Solana development team on Twitter earlier this year in a Twitter Spaces session to discuss possible solutions. This came after the network experienced several blackouts in January alone, causing users to become concerned.
Yakovenko stated during the session that plans are in the works to implement upgrades to assist in dealing with these issues and that they will be rolled out in the coming weeks. He also pointed out that some of them had already been implemented.
It would not be out of place to expect a significant improvement in Solana chain stability in the coming months, owing largely to the fact that it is still in its infancy and should be given some time to develop. However, the problems appear to be majorly unique to the network, raising questions about whether they will be ultimately resolved within the crypto space.
In a more technical sense, one could argue that the current release is still in the beta phase and that the full release will include upgrades to address these issues. However, in response to a Reddit post, a Solana moderator revealed that the “beta” attached is “just a word that could be removed at any time.”
In April 2021, there were proposals to implement an on-chain governance protocol to allow coin holders to influence the chain’s upgrade democratically. This would aid in the delegation of upgrade decisions to holders and stakers.
Solana is expanding, and with a market cap of $30 billion, the native coin SOL has risen to sixth place among the most valuable digital assets.
According to a recent Finder poll, the price of SOL is expected to reach $222 by the end of the year. Despite the outages that appear to be unique to the network, the rapid growth of the ecosystem has given reason to believe that Solana could one day become one of the dominant PoS chains. Harp concluded:
“Solana isn’t strictly a PoS consensus like other PoS systems, rather it is trying something new. Whether it will stand the test of time and scale remains to be seen.”
Today, Tulip Protocol made the announcement that they have integrated Chainlink Price Feeds in order to better secure their yield aggregating platform that is running on the Solana mainnet. The team had previously stated their intention to integrate Chainlink Price Feeds, and at this point, the connection has been completely put into action. Chainlink is the premier decentralized oracle network in the world, safeguarding tens of billions of dollars in smart contracts. It has diversified its offerings across other blockchains, notably Solana, Fantom, Polygon, BNB Chain, and others.
In a recent blog post, the team behind the Tulip Protocol explained that they had integrated Chainlink to provide users with more confidence that leveraged positions will be liquidated equitably using extremely accurate price data and that the protocol will continue to be completely collateralized at all times.
According to Tomasz Wojewoda, Head of Global Sales at Chainlink Labs:
“We’re pleased that Tulip Protocol has integrated Chainlink Price Feeds on Solana, helping secure its yield aggregation protocol with highly robust, decentralized market data. With the high-throughput performance of Solana and the strong security guarantees of the Chainlink Network, Tulip Protocol is able to empower users with a performant and secure platform.”
Tulip Protocol Seeks To Take Advantage Of Solana
Tulip Protocol brings together lenders who receive a return on their deposits and borrowers who are interested in gaining access to leverage. Users who initiate leverage positions are responsible for maintaining a loan-to-value (LTV) ratio that has been previously established. The Tulip Protocol then uses the asset price data that is provided by Chainlink Price Feeds to verify that this ratio is accurate. If the value of the collateral falls below the threshold that was established by the protocol, then their position will be immediately liquidated to assist in guaranteeing that the lenders will be repaid.
Tulip Protocol intends to capitalize on Solana by giving users the ability to more regularly reinvest their income and grow their assets without having to pay exorbitant amounts of gas expenses. Chainlink oracles can now be natively integrated on Solana, making it possible for Solana-based applications to benefit from enhanced levels of security and transparency. Yesterday, OpenOcean made the announcement that they would be integrating Chainlink Price Feeds in order to help secure the limited order functionality on many chains. These chains include Avalanche, Ethereum, Polygon, Fantom, and BNB Chain.
According to Senx, Co-Founder of Tulip Protocol:
“We’re excited to be using Chainlink Price Feeds on Solana to help secure our yield aggregation platform. By leveraging the most secure and reliable on-chain data available, we’re able to provide our lenders and borrowers with greater assurances that liquidations are based on accurate price data, and the protocol will maintain a healthy loan-to-value ratio through all market conditions.”
Allowing Stakers To Benefit From Higher APYs
Natives of the blockchain as well as newcomers to the technology are beginning to understand that decentralization does not necessarily equate to a secure platform. Given that Web3 services are currently disclosing their susceptibilities to attacks from both within and outside the network, further initiatives should be undertaken to improve the safety of user assets. Fortunately, a growing number of blockchain businesses are beginning to add various levels of security to their services in order to solidify the trust of their existing customers and attract additional investors in the near and distant future.
Tulip Protocol is the very first yield aggregation platform to be built on Solana, and it features auto-compounding vault techniques. The dApp was developed to make use of Solana’s blockchain, which has a low cost and high efficiency, hence enabling the vault techniques to compound frequently. Stakeholders are able to reap the benefits of greater APYs as a result, without the need for active management.
On this week’s episode of “The Market Report,” Cointelegraph’s resident experts discuss the latest updates concerning the recent Solana (SOL) hack.
To kick things off, we broke down the latest news in the markets this week:
Bitcoin realized price bands form key resistance as bulls lose $24K, significant whale activity between $22,000 and $24,800 adds to the complexity of the current spot market setup. Bitcoin (BTC) consolidated lower on Aug. 9 after familiar resistance preserved a multi-month trading range. When will we finally break out of this price range and make the move towards $30K?
Circle freezes blacklisted Tornado Cash smart contract addresses, Crypto data aggregator Dune Analytics said that, on Monday, Circle, the issuer of the USD Coin (USDC) stablecoin, froze over 75,000 USDC worth of funds linked to the 44 Tornado Cash addresses sanctioned by the U.S. Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons (SDN) list. Could this mark the end for Tornado Cash or is there a way they can redeem themselves?
Next up is a new segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Have some funds ready to buy further downturns.
Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some markets news to bring you up to date on the latest regarding the top two cryptocurrencies.
After Marcel’s market analysis, our resident experts discuss whether your SOL is safe and the latest updates on the Solana hack. We also discuss why the network has been victim to so many hacks and downtimes. What exactly do these exploits mean for the Solana platform and if you should be worried.
Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Radicle’s RAD and DigiByte’s DGB.
Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a 1 month free subscription to markets Pro worth $100!
The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.
Singapore, Singapore , Aug. 09, 2022 (GLOBE NEWSWIRE) — Today, the ZepetoX team (ZTX, ZepetoX.io) announced its foray into the web3 space, sharing its vision to build an open world that empowers creators and communities to build, play and earn.
ZepetoX is the crypto metaverse initiative jointly incubated by ZEPETO – Asia’s largest metaverse platform with over 320 million registered users – alongside leading global blockchain organizations including Jump Crypto.
As the sole blockchain project comprehensively backed by ZEPETO, ZepetoX will have exclusive ties to ZEPETO in terms of IP including technological, design, and content assets as well as bridges to facilitate user onboarding between the two platforms. ZepetoX’s blockchain development efforts will be advised by Jump.
“ZepetoX is our official venture into the blockchain industry. We feel that web3 opportunities should be advanced through a crypto-native approach, which is why we are excited to have Jump as a contributor to developing a new platform that would have exclusive connections to ZEPETO. Overall, we believe that ZepetoX can build the ideal web3 platform to not only bring blockchain to our existing users but also to expand our footprint in the blockchain space through various disruptive initiatives,” said Daewook Kim, CEO of Naver Z – the operating entity of ZEPETO.
“We are excited to support ZepetoX’s efforts aimed at onboarding new audiences into the rapidly growing crypto space. ZEPETO’s expertise and technological know-hows accumulated over the past years from building an immersive social platform will serve as a springboard for ZepetoX,” said Saurabh Sharma, Partner at Jump Crypto.
Building on the Solana network, ZepetoX will offer a web-based 3D open world with varying levels of gamification integrated as well as opportunities for users to monetize via ownership of digital assets and social interaction. Ultimately, ZepetoX aims to empower self-expression through customizable avatars and lands that can be equipped with NFTs from a rich collection of assets created by diverse creators, DAOs, or communities.
“I am thrilled to see IP powerhouses like ZepetoX choosing to build their metaverse on Solana,” said Anatoly Yakovenko, Co-Founder of Solana. “Projects like ZepetoX create new pathways for onboarding millions of users to web3.”
“Our global team brings a depth of crypto native experiences and our goal is to build on the foundation of ZEPETO to spearhead the adoption of blockchain among metaverse users, developers, and creators,” said co-CEO of ZepetoX, Chris Chang.
In the coming months, ZepetoX will launch its first land sale. The lands will be tradable on the ZepetoX marketplace, which will feature a variety of different NFTs as the open world project evolves. Further details on the sale will be available on the ZepetoX website in the coming weeks.
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About ZepetoX: ZepetoX (ZTX) is a web3 company building an immersive content-driven platform for users to create, trade digital assets and enjoy social interaction. Founded in 2022, ZepetoX is the blockchain initiative of ZEPETO, widely regarded as the largest Asia-based metaverse platform boasting over 320 million lifetime users with over 2.5 billion virtual fashion items sold.