On Jan 23, the autonomous interest rate machine for Solana, dubbed Solend, published a report detailing the latest network outage.
Solana was hit with network instability and outages lasting for almost 30 hours on Jan 21 and 22 according to the network status reporter. It’s the second network outage this month following service disruptions and degraded performance between Jan 6 and Jan 12.
The post mortem stated:
“There were many failed attempts at depositing and repaying, which made it difficult for users to save their accounts from being liquidated.”
It added that there was some volatility on price feeds which caused “wrongful liquidations.”
Can Solana really compete?
The root cause of the latest outage was the market crash creating arbitrage opportunities according to Solend.
“Liquidation and arbitrage bots began submitting a high volume of transactions in an effort to win liquidations and trades.”
Bots started to spam the network because the transactions were cheap and the profitability of a successful arbitrage was high. The heavy load caused validators to falter since they were not filtering out duplicate transactions. “The thousands of duplicate bot transactions also drowned out legitimate user transactions,” it added.
Pricing oracle feeds failed to update, some of which were “stale for hours” according to Solend. It stated that stale price feeds also exacerbated transaction failure rates.
A few tweaks to the system were made to restore network functionality and Engineers released version 1.8.14, to mitigate the worst effects of the issue. Solend stated that users who were liquidated during the incident will be reimbursed 50% of the liquidation penalty and those affected by abnormal volatility on the SOL feed will be reimbursed 100% of it.
Crypto twitter unleashed its usual torrent of criticism on Solana which has repeatedly claimed to be far superior to Ethereum in terms of performance.
In mid-December, Solana experienced a similar outage resulting in network congestion from a newly launched NFT collection. Three months prior to that in September, Solana was down again for 16 hours due to a transaction overload.
Four outages in as many months do not bode well for mainstream adoption of Solana, and the Solend team has not ruled out more of them;
“It’s unfortunate that these issues took place and while we hope it doesn’t happen again, chances are we’ll face similar issues again at least once.”
SOL price dumps
Prices of its native currency, SOL, dumped 36% during the outage and have not recovered as yet. SOL is currently trading at $89, its lowest price since late August, and down a further 7.7% on the day at the time of press.
The once darling of the crypto space is slipping down the market cap charts and has already been flipped by Ripple’s XRP, Cardano (ADA), and USDC. SOL is currently down 65.8% from its Nov 6 all-time high of $260.