Solana Outage Event | New Mainnet Testing, Solend Compensation Plan, SBF Issues Supportive Statement

Solana is facing serious technical issues recently, with its token price dropping below $100. The team claims to have resolved the network congestion problem in the 1.8.12 test version. FTX founder SBF has also expressed confidence, emphasizing that this is part of the development of scalability. However, The Block's research vice president believes that after multiple shutdowns, Solana will gradually lose user trust.

Solana Outage Report

Solana experienced network congestion and outages between 1/21 – 1/22. The Solana Foundation announcement cited the main cause as the existence of too many duplicate transactions. The new mainnet version 1.8.14 is now online on the testnet, with more improvement details expected to be proposed in 8-12 weeks.

The lending protocol Solend also released an analysis report, stating that due to the downtime, many Solend users' transactions, deposits, and repayments failed, leading to asset liquidation.

It pointed out that the market crash created a plethora of arbitrage opportunities for bots. Bots continuously initiated duplicate transactions on-chain, overwhelming regular users' transactions and causing verification nodes to be overwhelmed, seizing profitable liquidation and arbitrage opportunities.

At certain times, up to two-thirds of on-chain transactions attempted to force Solend to liquidate assets. Solana lacks the best mechanism to filter out duplicate transactions, which heavily consumes computational resources.

Compensation Mechanism

Solend subsequently updated the mechanism that relied too much on oracles for the borrowing and lending process, allowing transactions to proceed on-chain without the presence of oracles, making transactions more likely to succeed during on-chain congestion, thus avoiding loan liquidation.

Solend also introduced a whitelist system for liquidators. During network congestion, the whitelist mechanism is activated to prevent bots from initiating a large number of low-success-rate duplicate transactions, thereby reducing on-chain load.

The announcement stated that users who were liquidated due to Solana's abnormality will receive a 100% liquidation penalty waiver, and users who were liquidated during the period will receive a 50% liquidation penalty waiver.

Although the event was beyond Solend's control, the platform hopes to show goodwill, and the liquidation reversal process will take place in the coming days.

SBF: Solana Still Processing the Most Transactions

FTX founder SBF commented on the outage event after several days, leaning more towards motivational messages.

He stated that if the garbage transactions during the incident are removed, Solana still processed more transactions compared to other public chains. However, this is still far from enough, so the most important thing is to continue optimizing and maintaining ambitious goals.

SBF emphasized that Solana will continue to increase system throughput, efficiency, and expand according to demand in the future.

Research VP Larry Cermak

Larry Cermak, an early supporter of Solana, responded to SBF here:

The main issue in the past few days was that users couldn't complete transactions when needed the most. If I were liquidated because I couldn't top up collateral due to on-chain performance, it would be hard for me to trust similar transactions in the future.

He believes that users will eventually react. He cited the example of CEX, where he later chose to stop using Binance and Coinbase during peak trading periods due to delays and switched to FTX.