XRP Overtakes Solana In Turbulent Week

January 24, 2022 1:23 pm

Yet another problem occurred on the Solana blockchain, causing the network to become blocked and preventing DeFi users from modifying their collateralized positions.

The latest Solana network problem occurred amid a brutal crypto market-wide correction. As a result of the downtime, XRP surpassed SOL to become the seventh-largest cryptocurrency.

XRP tops Solana

The Solana network was down for the whole weekend, starting on Friday and continuing through Saturday. The network was overloaded as a result of an influx of incoming transactions. Solana Founder Anatoly Yakovenko claimed that “bots were sending duplicate TXs,” causing the network to slow down and transactions to fail, much to the displeasure of the DeFi community.

As of now, the market is still in the red, with bitcoin plunging to six-month lows and other coins suffering as a result. The big correction that began on Thursday has only worsened as the days have gone on. Solana (SOL) has plunged from a high of $144 in the early hours of Thursday to a record low of $81.21 at the time of this publishing. As a result, DeFi users who had borrowed assets via lending protocols such as Soland understood that they needed to increase their loan collateral to prevent being forced to liquidate their assets. Sadly, because of the severe network congestion, they could not increase the amount of collateral they had available.

This indicates that the vast majority of customers were forced to liquidate their accounts after transactions made by bots swamped the network, and they were unable to pay back their loans. Among those who suffered losses were Klean, a Twitter user who went by the handle of the same name.

With its value dropping by a further 20.01 percent in the last 24 hours, Solana is presently the largest loser among the top 20 cryptocurrencies in market capitalization. SOL has now lost more than 68.3 percent of its value since reaching a high of $259.96 in November. The most notable development is that XRP has surpassed SOL in terms of market capitalization. XRP is presently the seventh-largest cryptocurrency in terms of market capitalization, with a value of $27.32 billion, while SOL is currently at $27.14 billion.

Solana’s Developmental Difficulties

Solana has clearly earned the support of major investors due to its projected scalability, rapid processing speed, and cheap transaction costs, among other characteristics. The Bank of America anticipated Solana would overtake Ethereum in market share and eventually become the “Visa of the digital asset ecosystem.”.

Despite this, the hotly contested Ethereum competitor is extremely vulnerable to network failures. According to the company, the technological hitch that occurred over the weekend is the sixth time that the Solana blockchain has experienced an outage in the space of three months.

Author Mark Jeffrey of HarperCollins has stated that he no longer has faith in Solana. He went on to compare it to EOS, a network that has proven to be a massive disappointment since its eye-popping $4 billion initial coin offering (ICO) in 2017. “The battle is now between ETH, BSC, Fantom, Avalanche, and Terra,” Jeffrey stated after the interview.

Nonetheless, architects of the Solana network are trying to remedy the disruptions occurring for some time properly. According to the foundation, the Solana Foundation announced the release of version 1.8.14, which will attempt to “mitigate the worst effects of this issue,” according to the foundation. The 1.9 version is currently live on the testnet, where it is being thoroughly vetted before being made available to the public. The Solana developers are also scheduled to introduce other enhancements over the next 8-12 weeks.

Outlook For Crypto as a Whole?

While we are in the middle of a correction, the broader picture needs to be maintained. Despite the correction, year after year, most top cryptocurrencies are profitable, even after corrections.

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