Yet again Solana’s Network goes down and the network’s DEFI users suffer

In Last weekend's crypto crash one of the most affected group of crypto investors seem to have been SOL investors.

Nah, I am not alluding to holders of SOL coin but Solana DEFI users. This is because SOL users who took loans in Solana DEFI protocols like Solend, faced forced liquidations. This is because( yes stop rolling your eyes), Solana’s mainnet experienced performance degradation due to duplicate transaction problem.

Tweet complaining about Solana's outrage preventing the person from paying back loan

 Solana’s DEFI users were helplessly getting their collateral liquidated last weekend

Again, Solana Network went down due to Network congestion, unfortunately this meant that borrowers in the Solend platform were not able to top up their crypto collateral, as the market value of their crypto collateral went down, which resulted in liquidations of their positions.

Sol’s value during last weekend’s crypto blood bath fell from 143$ to 90$, so borrowers who did borrow depositing their SOL as collateral in the Solend platform were at a great risk to have their collateral liquidated.

Sol's price fall from 144$ to 90$ meant that those borrowers who had put their Sol deposits as collateral into DEFI lending protocols like Solend, had to deposit more SOL to increase their SOL collateral value to ensure there is enough collateral in value backing up their loan to prevent liquidation of their current SOL collateral.

To avoid liquidations borrowers have to log into the Solend platform and deposit more SOL to raise the value of their SOL collateral to ensure that there was enough SOL collateral backing up their loan.

Else their SOL would be liquidated by liquidators when the value of SOL collateral falls below a threshold percentage.

However, last weekend Solana DEFI users were not able to send transactions and top up their crypto collateral so they all had their cryptos liquidated from DEFI platforms like Solend.

Tweet from Klean who claims he lost 500 SOL because his transactions to repay his loan in Solend platform all failed

 Bot transactions flooded the Solana Network and brought down the network’s performance

Solana Blockchain was down this way for a period of 48 hours. The main reason behind this was that bots had sent fake transactions and congested the Solana Network, which could not process any more transactions.

Besides this, a flood of borrowers and liquidators also flooded the network sending transactions to fulfil their own purpose. However, it turned out that unfortunately things didn't work out for the borrowers):.

Solana Network is prone to get congested as anybody can flood it with transactions which the Network cannot handle

The crypto community now, have enough reasons to lose faith on Solana Blockchain with this big outrage event that cost big to Solana’s DEFI users.

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This incident has some of the crypto community lose faith on Solana Blockchain, they feel it won't be that Blockchain that will conquer the world tommorow.

The problem with Solana, as I have outlined in another article, is that it has a centralised make up and the operating nodes are not decentralised enough.

This network congestion is a common occurrence here also because the network does not have a mempool where transactions wait in the ques and with the transaction fees being cheap, everybody from bots to DEFI users, liquidators are incentivized to flood the network with transactions which the Solana Network is not able to handle.

 Solana Network team is improving the Network and sorting this pressing Network flooding issue

Anyway, the Solana Network engineers sorted the issue even if it was late by releasing the v1.8.14 upgrade to the Solana Mainnet with the nodes syncing their networks to the upgraded version.

There are plans by the Solana team to eliminate this issue and Solana Labs’ co-founder Anatoly Yakovenko has assured that Solana’s 1.9 mainnet release will eradicate this issue that the Salona Network is facing now. Currently, Solana’s 1.9 release is in the testnet phase.

Meanwhile there were announcements by the team that more improvements to the Network will be introduced in the coming weeks with new releases. Many of those to be introduced improving features are live in the testnet and are being thoroughly tested before they are released.

Right!!

 Solend looking to reconcile accounts of affected users

Meanwhile, Solend, Solana’s top DEFI lending platform has sympathised with its users who have been impacted with liquidations due to this Solana Outrage issue and is looking to reconcile accounts of affected users which I guess means repay them back.

Solend Protocol's Tweet to its protocol's users

Well, let’s see if Solana sorts out this pressing Network congestion issue. However, there will be users who sure would have lost faith with Solana with this latest incident.

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Bang bang, I too am routing for Cosmos baby!! ... Definitely if Solana does not sort this outrage issue in its upcoming upgrades of the Solana mainnet, its going to be flushed out of the Blockchain space as users will flock to Dapps of other prominent Blockchains.

Happy Weekend everybody. Thank you for reading my article!!