Key factors
- The Solana community went down for seven hours over the weekend after bots overwhelmed the system.
- Solana has suffered plenty of outages this 12 months, probably as a result of the community cannot sustain with its extraordinary progress.
- These technical points are half and parcel of cryptocurrency investing, which is one in all many the explanation why it is a high-risk asset class.
The Solana (SOL) community went down for seven hours over the weekend, in what was the seventh such outage to date this 12 months. The favored cryptocurrency’s value surged over 11,000% final 12 months. Nevertheless, some concern the system cannot sustain with its speedy progress, since there have been plenty of outages up to now 9 months.
The latest stop of Solana
The Solana network went down from Saturday to Sunday night (April 30 to May 1) as a result of the bot overloading the system. The traffic reached a record 4 million transactions per second, and the validators that validated the transactions could not catch up. The culprit was a non-fungible token (NFT) minting tool called CandyMachine, but it’s not clear how the bot was able to get the network out of consensus.
The company behind Candy Machine introduces a small fee for invalid transactions to reduce bot activity. This weekend’s problem isn’t as serious as some of Solana’s previous outages. According to CoinTelegraph, between January 21st and 22nd, the network was down for more than 29 hours due to duplicate transactions and network congestion.
Do investors need to worry?
Solana wasn’t the only blockchain that was overwhelmed over the weekend. The top smart contract crypto, Ethereum (ETH), was hit by a surge in gas prices after the sale of NFT land by Bored Ape Yacht Club disrupted the entire blockchain. Ethereum gas charges vary depending on how busy the system is. In this case, fierce competition for 55,000 lots of land caused fees to skyrocket. Some people have paid over $ 6,500.
At some level, I’m worried about these issues. But they are expected. This is a new and evolving technology, and many of these projects are being developed on the fly. In particular, blockchains like Solana that have grown exponentially in a short period of time. Billions of dollars are locked in the Solana ecosystem, but it’s still an ongoing task.
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It’s not just outages and technical glitches that need attention. It’s also a security breach or a hack. Decentralized finance (DeFi) can eliminate intermediaries from many of our financial transactions, but it also eliminates some of the protections we take for granted.
Last year’s DeFi hack lost more than $ 1.3 billion, according to a Certik study. This year, hackers stole more than $ 600 million from the popular cryptocurrency Axie Infinity. Many projects say that security is a priority. However, it is not always easy to know how true it is. In addition, when solving one problem, developers often unknowingly create another. For example, many blockchains are not compatible with each other, so developers use blockchain bridges to move assets. However, it is becoming clear that these bridges can expose investors to unexpected security risks.
Conclusion
Cryptocurrencies have made great strides in adoption, and recent Gemini reports state that they are now an “established” global asset class. But sadly, the ease of buying crypto, the big advances in DeFi app features, and the wealth of information you can access all believe in a relatively early stage in the industry.
Whether it’s an outage, a technical glitch, a security breach, or all three, these issues are part of your crypto investment. Instead of worrying, treat Solana’s recent outage as a reason to invest only the money you can afford to lose, and avoid assets altogether if you hate risk. It’s easy to get hooked on the hype around the crypto and the possibility of changing the way we manage money, but we’re in an unknown ocean, so we need to navigate them carefully. ..
