What’s Happening to Solana Right Now?
Things don’t seem to be going to plan for one of the biggest Blockchain networks, Solana. Launched in March 2020, the Solana coin entered the market intending to challenge Ethereum’s Blockchain with its fast processing time and its lower fees.
It took off shortly after it was launched and reached its peak of about $260 in November 2021.
Following the end of the year, the Solana coin saw a major decline alongside other larger cryptocurrencies, like Bitcoin and Ethereum.
As of January 24, the price of SOL has dived to about $87, the lowest it has ever gone since August 2021.
What could be the reason for this sharp decline?
Frequent network outages
In September 2021, Solana suffered a 17-hour outage because of a DDoS (distributed denial of service) attack. A similar situation happened for a longer time on January 4. Another 48 hours of network outage, which was resolved on Sunday, was recorded over the weekend. This makes it the fourth time the network went down since its launch.
Though several people choose to see what went wrong from different angles, the frequent network outage will, of course, cause panic among its users.
With this frequent network outage, many people seem to lose hope in SOL.
The frequent occurrence seems odd since Solana claims to carry out hundreds of thousands of transactions in a second.
While other cryptocurrencies continue to struggle, the outage has worsened SOL’s massive dip. Solana’s downward trend has been predicted to go even further because of this.
This shows how quickly Solana needs to improve their system to meet users’ demands.
Though Solana’s short-term outlook seems bearish, its long-term outlook seems to lean towards a bullish setup.
A general decline in the Crypto market
“The dip keeps dipping” seems to be the favorite term used by crypto traders now. The world of cryptocurrency started experiencing a major decline late last year and the market does not seem like it will be bullish anytime soon.
This sharp decline in the prices of stable coins has caused other coins associated with them to follow suit, causing a massive wipe out in market value.
Will Solana survive this?
Based on Solana’s unique technology (PoH), its ability to process thousands of transactions per second and a transaction fee that is significantly lower than competing blockchains. Solana seems to have an edge over rival cryptocurrencies.
The major limitation it seems to have might be its frequent network outages, causing doubts about its security.
However, in a statement made by the head of communications of Solana lab, he assured that work on improving transaction metering has started. If done, this brings an assurance that though things might not be great at the moment for SOL, the future looks bullish.