Solana is known for its promise of high-speed blockchain technology. However, beneath its claims of superiority lie serious issues that undermine its reliability and decentralization. Essentially, there are three major problems in the Solana ecosystem currently: frequent network outages, misleading TPS metrics, and validator centralization.
Frequent Outages
Since its launch in 2020, Solana has experienced 12 major network outages, disrupting dApps, traders, and platforms. These outages often result from network congestion, validator errors, or bugs, some lasting as long as 17 hours. A notable example occurred in September 2021, causing chaos for users who couldn’t access their funds or complete trades during the downtime.
Additionally, in January 2022, a DoS attack overwhelmed the network, further highlighting its fragility. For a blockchain with over $10 billion in total value locked (TVL) at the time, these disruptions have caused significant financial losses and diminished trust in the network’s reliability.
TPS Myths
Solana’s marketing boasts up to 65,000 TPS, a figure that far surpasses competitors like Ethereum. However, this number is misleading. In reality, Solana includes validator voting and failed transactions in its TPS calculation, artificially inflating the numbers. The actual TPS for user transactions is closer to 250 TPS, much lower than the marketed figure.
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For comparison, Ethereum processes 30 TPS for successful transactions, but Solana’s reported TPS includes activity that doesn’t directly benefit users. This misleading metric paints a false picture of Solana’s performance, making it seem far more capable than it actually is.
Validator Centralization
Unlike other blockchains that aim for decentralization, Solana’s validator network is highly centralized. The top 18 validators control over 33% of the staked supply, giving a small group significant influence over the network. This level of control allows validators to potentially censor transactions or block consensus.
Becoming a validator on Solana is costly, with the average cost exceeding $500,000 annually for hardware and operations. Moreover, validators need to stake at least $20 million in SOL to have any meaningful influence. This creates a high barrier to entry, limiting participation to only the wealthiest individuals or institutions.
Furthermore, Jupiter, a leading DEX on Solana, operates one of the top 18 validators. This creates a potential conflict of interest, as Jupiter can profit from both generating and validating failed transactions, earning fees even on user failures. This centralization and validator-driven profit model raise serious concerns about the network’s integrity.
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Solana’s promises of high speed and low costs are overshadowed by frequent outages, inflated TPS metrics, and validator centralization. With 12 major outages, transaction failure rates as high as 75.72% on Jupiter, and a validator structure that favors the wealthy, Solana faces significant challenges. While the network may seem attractive on the surface, these underlying issues make it clear that Solana’s future is far from certain.
