The network underpinning one of this year’s fastest-rising cryptocurrencies is having problems validating transactions, according to a Twitter account run by the Solana project.
The problem stemmed from “resource exhaustion” in the network that caused denial of service, one tweet from the Solana Status account said. Third parties that validate transactions on the blockchain are preparing for a potential restart of the system if needed, the post added.
“Solana mainnet-beta is experiencing intermittent instability,” read another tweet. “Engineers are investigating the issue.”
“It has some interesting technical features, but realistically Solana hasn’t yet been fully tested in a live setting,” said Strah Savic, head of data and analytics at FRNT Financial. “What we are likely seeing is the experimental nature of blockchain tech playing out.”
The price of Solana has surged almost 270% over the past 30 days to recently trade at $162.89, according to CoinGecko.com. It’s up more than 32,000% from its low of 50 cents in May 2020, giving it a value of more than $48 billion. That makes it the seventh-biggest cryptocurrency, according to CoinMarketCap.com.
Solana mainnet-beta is experiencing intermittent instability. This began approximately 45 minutes ago, and engineers are investigating the issue.
— Solana Status (@SolanaStatus) September 14, 2021
Some trades on Tuesday were taking longer to process than the time allowed by the network, meaning transaction blocks couldn’t be finalized and trades weren’t being processed, according to a person familiar with the situation. A process to restart the network would need to be agreed upon by a consensus of the Solana community, the person added.
A technical issue about two weeks ago caused a period of “intermittent performance degradation” that lasted about an hour, according to the Solana Status Twitter feed. That issue is still being investigated but it’s believed to have been also caused by automated bots flooding the network with transactions to buy a certain new coin, according to the person familiar with the situation.
Like Ethereum, the Solana blockchain is a platform for decentralized finance, or DeFi, applications. The goal of Solana is to create a fair and open financial system, where no one entity has a speed advantage over any other, Solana co-founder Anatoly Yakovenko, a former Qualcomm Inc. engineer, told the “Odd Lots” podcast last month.
Although it’s difficult to speculate on the issue until more information is available, third-party sites do show that transactions aren’t being processed by Solana, said Savic. And the Solana network’s native token — SOL — is up 2%. “Similar past technical red flags on other networks have been ignored by crypto investors,” he said.