Solana Faces Pressure Like Never Before Heading Into 2023
Solana’s Tough Year in 2022
The Solana Blockchain has been no stranger to controversy since its inception, facing a multitude of scandals, outages, and hacks. Solana has had several outages that have been virtually unheard of on a blockchain of its scale, with Solana suffering 10 separate outages in 2022 alone; the most notable of them lasting hours at a time.
Outages
In January, Solana faced partial/complete outages from the 6th-12th; with some outages lasting anywhere from 8–18 hours. In the later part of May and early part of June; Solana suffered from a clock drift, where the blockchain’s time differed from real-world time causing transaction times to be immensely delayed. On October 1st, Solana suffered a disastrous outage lasting more than six hours in total; which the organization stated resulted from a validator generating an invalid block on-chain.
Even the Solana team has had no choice but to concede that the blockchain has faced an abundance of issues, although sugarcoating these admissions of the blockchain’s incompetence with future solutions and upgrades.
“We’ve had a lot of challenges over the last year, I would say this whole last year has been all about reliability.” — Anatoly Yakovenko; Co-Founder of Solana.
Solana’s Co-Founder; Anatoly Yakovenko, has fought against the controversy through a series of appearances discussing the trials and tribulations the blockchain faced as well as its allegedly optimistic future; with long-term network upgrades to resolve a lot of the issues the blockchain came under scrutiny for over the past year.
“[We’re] in a constant fight between performance, security, throughput, and decentralization, all these problems… whenever you improve one you may actually hurt some of the other ones but I think we’ve done an amazing job in solving a bunch of those.” — Anatoly Yakovenko; Co-Founder of Solana.
In August, Anatoly praised a partnership with the crypto firm Jump Crypto to develop Solana’s scaling solution under the name of “Firedancer;” a proposal that many claimed to be the long-term solution to the network. But as months have passed, the outages and problems continue to persist.
Association With FTX and SBF
Solana has also drawn heavy criticism after the downfall of Sam Bankman-Fried’s (SBF) FTX empire, with controversy stirring in regards to FTX’s close association to Solana’s ecosystem.
Before SBF’s disgraced exit from the crypto industry, he was one of the most vocal proponents of the Solana ecosystem on the internet; offering immense aid to core developers and even building a Solana-based DEX to further support the ecosystem.
It is undoubtedly concerning that the founder of one of the largest failures in crypto industry lauded the Solana ecosystem and its native token, SOL. Furthermore, SBF had a financial stake in Solana’s success with both FTX and Alameda Research holding an abundance of SOL on their balance sheets. Although the Solana Foundation has no direct association to SBF and had limited exposure to the fallout (Solana Foundation reported they lost around 1% of their treasury funds that were locked up on the exchange); SBF’s frequent praises and investments have been a heavy blow to the ecosystem as many fear anything the disgraced founder touched.
Developers and Resources
Solana’s ecosystem has also been rumored to be lacking developers as data aggregator; Token Terminal, claims that active Solana developers have fallen by over 90%. Although such claim has been backed up by data analysis, Solana has heavily disputed the data so it is not entirely clear on the legitimacy of such claims. Nonetheless, such concerns being highlighted with mainstream publicity only adds more gasoline to the fire amidst the plethora of issues Solana faces.
If there is a true shortage of developers, this poses a serious threat to the ecosystem that could result in Solana’s ultimate demise if not handled properly and promptly. Only time will tell on the validity of these concerns regarding active developers in the Solana ecosystem.
NFTs
Not only is Solana suffering from a wide range of technological issues, its ecosystem is being heavily impacted with the onslaught of horrible events taking place in the Solana NFT space. From the immense amount of collective fear, uncertainty, and doubt; along with some of Solana’s top projects migrating to other blockchains, many people who once praised Solana are now fleeing to other ecosystems.
Just before the new year began two of Solana’s biggest projects; DeGods and y00ts, announced that they would be exploring alternative ecosystems to migrate to for the betterment of the projects’ future and community. DeGods announced the project would be migrating to Ethereum while y00ts announced the project would be migrating to Polygon.
The announcements were a breeding ground for controversy and conflict, with members of the Solana community heavily divided on these projects’ decisions. Some have praised the decisions optimistic of the future of such a decision while others have heavily criticized the projects for abandoning the ecosystem they promised to support and innovate.
“There’s an argument to be made that [DeGods] has capped out on Solana. It’s hard to accept, but it’s been tough to grow at the rate we want to grow. If Ethereum is where we have to go to keep growing, it’s what we have to do.” -Rohun Vora, Founder of DeGods and y00ts.
Although the move may be in the best interest of the projects, many have equated it to the final nail in the coffin for Solana and its future. With so much fear and uncertainty from investors and even projects building from within the ecosystem, people are leaving Solana en masse.
Selling Pressure
The plethora of issues the ecosystem faces along with the controversies it continues to deal with has put immense selling pressure on Solana’s native cryptocurrency; SOL. Along with the fact that the broader crypto space is already being devastated by failures of prominent companies like FTX and Terraform Labs as well as the effects of the global economy’s poor performance; Solana and its community are being pressured like never before.
No matter if you are a vocal Solana Maximalist or vocal Solana Critic, a prominent ecosystem like Solana collapsing could be absolutely devastating for the broader crypto as retail investors are becoming more and more fearful to invest or participate. One can only hope Solana can recover from the multitude of issues and controversies it faces.
