Lost SOL? Persistent challenges continue to impact Solana price
The past thirty days have been an extremely bearish time for cryptocurrencies. The sector's aggregate market capitalization plunged 33% to $1.31 trillion and Solana's (SOL) downfall has been even more brutal. Currently, SOL has seen a 50% correction and trades at $51.
The network aims to overcome the Ethereum blockchain's scalability problem by incorporating a proof-of-history (PoH) mechanism into a proof-of-stake (PoS) blockchain. With PoH, Solana delegates a central node to determine a transaction time that the entire network can agree on.
The low fees delivered by the Solana network have enticed developers and users alike, but the frequent network outages continue to cast doubt on the centralization issue and it has likely scared away some investors.
Pinning the underperformance exclusively to the 7-hour network outage on April 30 seems too simplistic, and it doesn't explain why the decoupling started a month earlier. According to Solana Labs, the issue was caused by bots initiating numerous transactions on Metaplex, a nonfungible token (NFT) marketplace built on Solana.
The transaction volume surpassed six million per second during its peak, overflowing individual nodes and as a consequence, validators ran out of data memory which led to a loss of consensus and network interruption.
To mitigate the issue, developers introduced three steps: a change in the data transfer protocol, stake-weighted transaction processing and "fee-based execution priority."
Solana's main decentralized application metric started to display weakness earlier in November after the network's total value locked (TVL), which measures the amount deposited in its smart contracts, repeatedly failed to sustain levels above 60 million SOL.
However, the 50%
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