Solana Crypto Has Crashed 85 Percent And The Network Keeps Going Down: 3 Things To Know

Solana Crypto Has Crashed 85 Percent And The Network Keeps Going Down: 3 Things To Know

Solana crashed

Photo: Ivan Radic, https://www.flickr.com/photos/26344495@N05/ https://creativecommons.org/licenses/by/2.0/

Solana, once one of the largest cryptocurrencies by market cap after Bitcoin and Ether, saw its price fall more than 12 percent on Wednesday after its platform endured the second outage in a month, forcing applications built on its blockchain to go offline.

Faster and cheaper to use than Ethereum, Solana has gained popularity in the DeFi and NFT ecosystems, helping it gain a reputation as the “Ethereum Killer“. Solana’s blockchain processes 50,000 transactions per second, and its average cost per transaction is $0.00025, according to its website. By comparison, Ethereum can handle about 13 transactions per second and transaction fees are more than Solana’s. Here are three things to know.

1. Solana is the No. 9 crypto by market cap

The Solana price reached a low of $38.36 in the past 24 hours, down from an all-time high of $260.06 on Nov 6, 2021. Solana was trading at $40.48 as of this writing. Coinmarketcap ranked it as the No. 9 crypto with a $13.729 billion market capitalization.

In September 2021, Solana ranked No. 6 on Coinmarketcap after Bitcoin, Ethereum, Cardano, Binance Coin and Tether. Now it is also outranked by USD Coin, BNB and XRP.

Investors who had focused mainly on Ethereum began diversifying into Solana as the price of crypto coins started rising in 2021. Solana closed a $314 million private token sale in June 2021 led by Silicon Valley venture capital firm Andreessen Horowitz and Polychain Capital.

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However, multiple outages on the Solana network have been bad for business, including one on May 1 that locked up the network for several hours and the June 1 outage that lasted four-and-a-half hours, according to the Twitter account Solana Status.

2. Exchanges reported problems with withdrawals

Several crypto exchanges reported problems with Solana deposits and withdrawals including Binance, Coinbase and Crypto.com.

Solana blamed the June 1 outage on a bug in how the blockchain processes a niche type of transaction that’s designed for offline use-cases, Coindesk reported.

Solana validators process transactions and update accounts and balances, then publish these on the blockchain, earning transaction fees as a reward.

3. Big tech investors were accused of manipulating the market

A controversial clip from a 2021 podcast showing some big tech investors joking about buying Solana (SOL) with discounts and their intentions for its future was interpreted by many as an open example of venture capitalists manipulating prices on the market, Bitcoinist reported on Nov. 5, 2021.

The controversial clip is from episode No. 50 of the podcast “All In,” hosted by Chamath Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg.

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“As Chamath Palihapitiya joked about getting discounts to buy Solana, Twitter users got enraged over the idea of giving the rich even more privilege — with discounts to dump on retail — inside the crypto environment,” Bitcoinist reported.

The clip resurfaced on Twitter on June 1.

“In honor of Solana being halted today + down 85%, here are the besties bragging about the ol pump and dump,” Bucco “Buyback” Capital tweeted.

“$SOL outage in a bear market is going to hit hard all Solana related Dapps. Dump to under $30 is very likely now. Not sure if they ever will want to fix the blockchain” Daily Market Movements tweeted.

Photo: Ivan Radic, https://www.flickr.com/photos/26344495@N05/ https://creativecommons.org/licenses/by/2.0/