homecryptocurrency NewsWhy is Solana, once pegged to be a Wall Street darling, currently facing turbulent times
By CNBCTV18.comAug 23, 2022 8:27:21 PM IST (Published)
Solana has over 1,900 validators, but smaller clusters of around 150 validators process transactions. This form of centralisation, in conjunction with its sub-second block time, enables a throughput of 50,000 to 65,000 transactions per second, making Solana the fastest blockchain currently on the planet.
Solana is a blockchain that has conflicting conversations around it. Many see it as an able competitor to Ethereum, given the lower cost of transactions and high throughput. However, hacks and technological failures have given critics reason to raise their voices. In this article, we dive deep into what Solana is, its technology, its rise and why it is facing many troubles in current times. We will also take a look at what could be the possible future of this Ethereum killer.
The beginning
Solana was founded in 2017 by seasoned software engineer Anatoly Yakovenko and built by Solana labs in the US. Its current development is undertaken by the Solana foundation, a non-profit based in Switzerland.
In its three staged ICO from 2018 to 2020, the project raised close to 25 million dollars to continue its development and over 300 million dollars from crypto venture capitalists last year.
FAQs
Solana's incredible transaction speeds make it easier for bots to spam fake transactions and flood the blockchain, causing it to come to a standstill. In Solana's defence, the spamming is constant, and it is, in fact, commendable that the downtime is usually restricted to less than 24 hours.
Why is Solana not doing well? ›
In particular, the collapse of FTX, a significant cryptocurrency exchange with deep ties to Solana, triggered a sharp decline in SOL's value. The coin lost over 50% of its value overnight, a stark reminder of the interconnected risks within the crypto ecosystem.
Why did Solana surge? ›
Solana staged its biggest rally in more than a month after VanEck, an exchange-traded-fund issuer, submitted a filing for a product based on the cryptocurrency. The token rose as much as 11%, the highest since late May, following paperwork submitted to the Securities and Exchange Commission on Thursday.
Why is Solana going up so fast? ›
Increased network activity leads to increased demand for SOL, driving up its price.
What makes Solana stand out? ›
Solana stands out in the crowded blockchain space with its unmatched transaction speed, scalability, low-cost operations, robust security, and developer-friendly environment. These advantages make Solana an ideal platform for building the future of decentralized applications.
What went wrong with Solana? ›
Major congestion issues are plaguing the Solana network, leading to 70% of transactions failing. In response, developers are stepping in. Solana developers announce measures to address network congestion.
What are the flaws of Solana? ›
CON: Centralization Concerns
Despite its innovative approach to scalability, Solana has faced criticism for its perceived centralization. The network relies on a limited number of validators, raising concerns about potential vulnerabilities and central points of control.
Will Solana ever recover? ›
Solana Price Prediction 2026
However, there has been such a massive selloff that one would assume 2026 should be better than 2022. Most experts agree that Solana will have recovered significantly by then, with most people seeing an average price of around $260 near former all-time highs.
Does Solana have a future? ›
Our most recent Solana price forecast indicates that its value will increase by 1.49% and reach $172.60 by August 03, 2024. Our technical indicators signal about the Neutral Bullish 57% market sentiment on Solana, while the Fear & Greed Index is displaying a score of 52 (Neutral).
Why Solana plunged? ›
Investors were taking a risk-off approach as interest rates rose and earnings season began. Bitcoin's upcoming halving may be seen as bullish, but it didn't help the market this week. The sell-off hit everyone, but Dogecoin, Solana, and Polygon were hit hardest.
“The Solana ecosystem is showing robust growth, evidenced by increased DEX activity, rising daily active users, and growing fee accrual to the network,” shared Pat Doyle, a blockchain researcher at Amberdata. “These strong fundamentals, coupled with the positive market sentiment, are pushing SOL forward.”
Is it better to invest in Solana or Ethereum? ›
Solana offers a significantly higher transaction speed (2,600 transactions per second) compared to Ethereum (15 transactions per second), enhancing the user experience with faster and more efficient transactions.
Will Cardano be faster than Solana? ›
Transaction Speed And Scalability
Solana currently facilitates transaction speeds of up to theoretically 65,000 TPS through core innovations in its hybrid consensus infrastructure – drastically higher throughput than Cardano's estimated 1,000 TPS limit.
What caused Solana to spike? ›
Solana (SOL) blockchain has, for the first time, outpaced the Ethereum network in terms of profitability, causing SOL's value to surge. On-chain analyst Dan Smith brought attention to this significant event in a recent post on X. He noted that Solana's economic value has exceeded $2.2 million.
Who is the owner of Solana? ›
Solana Labs CEO Anatoly Yakovenko says he thinks meme coin trading is "bizarre," though he said the episode has provided a welcome stress test for the fast-growing network.
What problem is Solana trying to solve? ›
Powered by its unique combination of proof of history and what's referred to as delegated proof-of-stake algorithms, the main problem Solana was attempting to solve was Ethereum's scalability issues. Delegated proof-of-stake is a variation of the more traditional proof-of-stake algorithm.
Is Solana having issues? ›
Current Solana status is UP.
Why Solana is so slow? ›
Technical Challenges Slow Down Solana
The Solana blockchain recently experienced some serious congestion issues, leading to a cascade of problems for its users and developers. This congestion resulted in increasing transaction errors and delays, which caused several crypto projects to delay their launches.
