What Caused Solana’s Dramatic Collapse?

Solana, a project that claimed to be the new Ethereum killer and was once valued at almost $260, is now in trouble, losing 95% of its value since the FTX collapse, and is forecasted to drop further. Solana’s lack of prioritization on decentralization led to the ingestion of spam and bots, forcing developers to shut down the entire blockchain for hours, leading to losses for users’ open trades and leaving it vulnerable to further DDoS attacks. Up to 90% of Solana developers have left, with top NFT projects moving to Ethereum and Polygon, leading to a significant drop in total value locked assets on the network.

The Rise and Fall of Solana

Kids, you remember when your dad left to go to the store and get some milk but unfortunately he never came back? Well, that potentially could be Solana. It’s time we talk about this dead project and find out if your daddy’s ever coming back from the store. Let’s get it!

The Early Days of Solana

Solana was definitely one of the hottest projects during the last bull run. Between early 2020 and late 2021, the price climbed from $1 all the way to almost $260. And it seemed like it wasn’t just speculation at the time. They were adding a ton of developers to the ecosystem. They had applications that people were actually using. And Solana was the leader in the house when it comes to being the new Ethereum killer. Was this going to be the project that was going to take ETH out finally?

The Issue with Decentralization

The tricky thing about blockchains is that the decentralization part is what makes the user experience slow, clunky, expensive and complicated. But yet the decentralization is the No. 1 thing that makes this technology valuable. It wasn’t long before Solana started reaping what it sowed when it came to its lack of prioritization on decentralization.

Problems on the Network

The low costs of fees on the network made it easy for spam and bots to infiltrate what they had built. And when these bot attacks occurred, the Solana developers likened them to DDoS attacks on Solana. In some cases, these bots would manage to shut down the entire blockchain for hours, something that’s obviously unacceptable in the world of crypto that’s supposed to be 24/7.

The Connection to FTX

Despite all these problems, the Solana price, it kept thriving throughout the entire bull market. And now we understand why. It was due to market manipulation from SBF, FTX and Alameda, which is all basically the same thing. And when the SBF house of cards began to crumble, things started looking quite dire for Solana.

The Exodus of Developers

Now, we’re getting reports that developers are leaving Solana in exodus. A report from Token Terminal says up to 90% of the developers have left. Now, the official Solana account, they hit back. They said that’s not true. They claim there’s 25,000 unique developers still working on the platform citing data from the audit firm sec3, although it seems this auditing firm is specifically focused on the Solana ecosystem. So there might be a potential conflict of interest. Regardless of the exact percentage, developers are leaving in droves.

What’s Next for Solana?

As far as TVL, or total value locked in assets on the network, well, it’s down 98%, from $215 million all the way down to a measly $10 million. If Solana can’t turn things around, it could be the next EOS or Tron, layer 1 projects that were once hyped up as Ethereum killers but are now largely irrelevant. The lesson to be learned here is that while layer 1 investments offer a lot of potential value in the next bull run, don’t get led astray by the latest VC toy. Look for projects with strong development, a professional team, and actual users. And when they crash, don’t be left holding the bag.

Notify of
Inline Feedbacks
View all comments

Is the Crypto World Turning its Back on Meme Coins?

Adyen is set to expand its offering of payment services to Canadian merchants. The Dutch payments firm has received authorisation from the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC),...

Is This Growth Stock Severely Undervalued? Anticipating 1600% Revenue Growth in One Year!

In a YouTube video, Sam discusses CleanSpark (CLSK), a bitcoin mining company he believes to be underrated and undervalued compared to its peers. Despite lawsuits against CLSK, Sam is bullish on the company...

Plan Your Millionaire Strategy for Profit Taking Before the Next Bull Run!

In a video about cryptocurrency investing, the presenter emphasises the importance of taking profits and shares his own mistakes from 2021 where he did not take profits and lost out in the bill market....

Discover Hypermine - Your Ticket to Success in the Bear Market on Pulsechain!

HyperMine.club, a dynamic and community-driven ecosystem for the new PulseChain community, will be launched on PulseChain after its launch. Its native token has no pre-allocations and the management team...

Diamond BUSD: The Hot New Crypto Staking That Earns BUSD While You Sleep - Discover Proof and Results! πŸ’° πŸš€

Jim Crypto has posted a follow-up video to his Diamond B USD review, showing the progress made since his last video and discussing the cryptocurrency’s features. He highlights the smart contract’s...

Attention XRP & Crypto Holders: This is a Must-See!

In this video, the host, Dusty, discusses the recent drama in the crypto world, including a debate between Craig Wright, the Bitcoin founder, and David Swartz, the CTO of Ripple. Dusty also mentions his...

"Could SUI Network Be The Next Game-Changer in the World of Altcoins?"

Suite Network is a new cryptocurrency project that has gained attention online and is currently trading at 1.34. The project is a layer 1 blockchain, meaning it competes with the likes of Bitcoin and Ethereum,...

Unraveling the Mystery: The Exact Number of HBAR to Achieve Millionaire Status!

A video by BitBoy Crypto explores how to become a millionaire through investing in HBAR tokens, which serve the Hedera project, a hashgraph that differs from the typical blockchain. Assuming HBAR will...

Unbelievable Crypto Hearing: What's Going On Here?!

The US government continues to crack down on the cryptocurrency industry, causing investors to speculate which projects and companies will be targeted next by regulators like the SEC. A recent Congressional...

Discover CryptoUnity: Open the Door to Financial Freedom and Secure Your Spot in the CUT Presale Today!

Crypto Unity is an all-in-one platform designed for beginners in the world of crypto and blockchain. The platform offers a simple user interface and user experience, a crypto exchange, education in the...
Load More



Coming Soon

Subscribe and be the first to know about the launch

Look at our roadmap


Thanks for subscribing

You will only receive important notifications
For now, follow to our social networks