Solana | HODL Or FUD
- Patrick Sullivan
- Jun 29, 2023
- 2 min read
Solana is no stranger to controversy
Quickly rising to the top 10 crypto projects by market cap in 2021 after just being launched in 2020. Many people, including well-known individuals such as Sam Bankman Fried, became profound success stories tying much of their net worth gains to the sudden rise of Solana’s native coin $SOL.
Solana was given the nickname “Ethereum Killer” a title many other Layer 1 protocols had attempted to capture before it.
Now halfway through 2023 a completely different narrative emerges.
Over the last three months going back to March 2023. Solana has been one of the most active layer 1 Blockchains in the entire market. Keeping up with both Polygon and Ethereum in daily active addresses and crushing chains like Aptos avalanche, Ethereum and Polygon when it comes to daily number of transactions.
But can we trust these statistics?
Solana and network participants have a deep history of manipulating statistics, or outright hiding key pieces of information that are required for us as investors to make comprehensive choices on where to put our money.
In 2022, Solana had 11 major and three minor Network outages. So far in 2023 there has only been one outage. A dramatic improvement no doubt. Before I will even consider Solana as an investment vehicle, there needs to be NO outages. It is nonnegotiable and unacceptable in my opinion.
The solution for these outages is often to reset the entire blockchain. reverse back a couple blocks to the point where everyone agreed and continue on with the network. This is only possible because of Solana’s centralization of nodes.
Along with the accusation that Solana participants are faking metrics such as TVL and how around 80% of transactions are made up of its own consensus messages, artificially inflating their TPS. There are just too many things that send up red flags for me to feel comfortable holding a position is $SOL.
This write-up is not to say Solana is doomed, nor am I saying $SOL can't make people money. If they solve all of their downtime issues and appeal to major companies or institutions then they absolutely can grow their coin price.
It’s just not an investment risk I’m willing to take!
Here is a classroom lesson on Solana outlining a bit more details about the blockchain:
Comments