The price of the Solana token showed an impressive growth at the end of August: from the local bottom to its new all-time high, the asset has risen in price by almost five times in just a few weeks.
However, on September 14, an unexpected event happened – the Solana blockchain stopped for more than 17 hours. On the eve of the organization Solana Foundation, which is the basis of the crypto startup, released an official report on the incident and shared versions of what actually caused the incident.
We checked the actual data: today the native token of the Solana blockchain under the ticker SOL is trading at $ 132. At the same time, at night, the cost of the cryptocurrency reached a local bottom at the level of $ 116.
At the same time, SOL continues to occupy seventh place in the overall rating of cryptocurrencies in terms of capitalization, that is, the product of the number of coins by their rate.
As a result, SOL lost the most percent of the price on a weekly scale among the top cryptocurrencies in terms of capitalization.
Why did the Solana blockchain stop?
First, let’s restore the chronology of events. According to the Solscan blockchain observer , the last block in the Solana network before the shutdown was created at about 15:00 Moscow time on September 14. After some time, a message appeared in the official project support account that the network was «experiencing short-term instability. «
Depletion of network resources leads to problems with transaction processing, the developers are already working on the incident. Validators are preparing for a potential blockchain restart if needed.
Recall that validators are network participants who confirm the correctness of what is happening in the cryptocurrency blockchain and create blocks. For this, they receive a reward, which, among other things, can be sent to delegates. We are talking about network participants who want to help the development of the blockchain, but do not have enough funds to become a validator. Typically, delegates delegate their coins – or votes – to validators and receive a prorated portion of the reward minus fees.
The head of Solana Labs, Anatoly Yakovenko, a few hours after the blockchain stopped, began coordinating validators on Discord. On his Twitter account, in response to questions from one of the users, he noted that the root of the problem lies in the large flow of transactions from bots participating in the IDO Grape Protocol based on the Raydium decentralized protocol, which is based on the Solana blockchain.
Recall that Initial DEX Offering (IDO) is a relatively new type of launching new project tokens through a decentralized exchange. Unlike ICO or IEO , here the fundraising process takes place using smart contracts.
Previously, we participated in several IDOs on the Raydium platform in the form of the AcceleRaytor launchpad. Note that the experience was not the best: due to the excessive load on the network, transactions in Solan practically did not go through, which made it almost impossible to purchase the newly launched token. In this regard, participation in the process often ended only in wasted time and the lack of serious earnings.
IDO members used bots to ensure that they get into the token sale queue and buy new coins using spam transactions. However, this led to a negative effect: some nodes of the Solana network simply stopped working due to memory overflow. The altcoin blockchain ceased to be replenished with new blocks, since the network could not come to a consensus, that is, agreement on what was happening inside the blockchain.
Recently published in Decrypt, an official report from the project team called the incident a DoS attack – a hacker attack on a computer system in order to bring it to failure and stop working. The attack itself was not targeted, just the result of what happened is very similar to such conditions.
Solana’s validators were forced to hard fork from the last confirmed block to the block. According to the developers, this process required a consensus of at least 80 percent of the node owners. Here is a quote on this matter.
Thanks to the validator community, engineers and the entire Solana ecosystem for coming together to address this issue. On those rare occasions when such difficulties arise, it disturbs everyone. At the same time, the elimination of consequences in a decentralized network becomes a truly whole community project.
The project team has promised to release a more detailed technical report on the issue in the coming weeks. Some time after the incident, it can be called one of the key reasons for the current serious drop in the value of SOL tokens in a few days. As you can see, even such a well-known startup in the cryptosphere, which ranks seventh in terms of capitalization among all cryptocurrencies, may have sudden technical problems, potentially threatening a large collapse in value.
At the same time, we believe that this event will not in any way affect the prospects for Solana in the future. Still, the problem of spamming small transactions to create problems for the blockchain has happened before.
For example, in the fall of 2016, Ethereum faced the so-called Shanghai attack. Then the ill-wisher deliberately overloaded the network, while worsening its reputation.
Most likely, over time, the current situation will also become part of history. Well, developers will surely find a way to prevent this from happening in the future.