As the market went through turmoil these past few days, there was a significant demand to utilize any L1 blockchain. Many traders needed to trade int to stablecoins, unwind their debt positions, or even have to be liquidated by a lending protocol for the market to remain efficient and functional.
Yet Solana has been practically unusable for the past 48 hours. So far, the developers have cited congestion as the issue. Some users believe that the congestion was caused by bots sending duplicate TXs, considering Solana does not have a fee market like Ethereum. Furthermore, while they have seem to have some hot fixes out now, a new update should be coming out in the next 8 – 12 weeks that seriously solves this problem. Solana was even trending on Twitter because so many people were talking about the downtime.
Yet this downtime for Solana is not an isolated incident.
Solana Goes Down More than my Titans in the Playoffs
In the past six months, even before the incidents in the past 48 hours, Solana went down three times. While Solana is earlier on its life cycle than other layer ones, I do not remember a single instance of Ethereum or even Bitcoin going down.
Considering L1s are meant to support complex financial transactions, any downtime poses serious risk to the long-term viability of the chain. More centralized L1s tend to face these types of issues far more often than more decentralized networks.
Solana has cited various reasons for their network going down, from large volumes of transactions to denial of service attacks.
Interestingly, Solana.Status, the site that is supposed to track Solana’s uptime, does not always accurately report if the network is down.
Avalanche Goes Down… but Less Often
Similar to Solana, the more centralized L1 Avalanche also experiences down time when seeing high volume on their chain.
While Avalanche has had less severe outages compared to Solana, it has experienced multiple issues of degraded performance, which has delayed transactions on the network. You can see a history of these issues here. Overall, the site seems to more accurately portray downtime than Solana’s status site.
Downtime to Become a Larger Issue in a Bear Market
All sins are forgiven in a bull market. But in a bear market, the market cares a lot more about the functionality of the network. Solana is now 62% from its ATH, while Avalanche is down almost 58% from its all time high. Both drops are far more sever than ETH, which is currently down 49% from its ATH.
As the bear trend continues, I think alternative L1s that experience issues will continue to underperform their competitors like Ethereum.
Now they also might underperform purely because they are reverting to the mean after substantially outperforming ETH in the bull market, but I do think aspects like network uptime will become a focus of the market in the bear.