It’s been a rather rough go for Solana (SOL-USD) investors of late. A number of high-profile network slowdowns in the past have hampered this token. However, this weekend, yet another attack took place, taking the Solana network down for a period of seven hours.
Unsurprisingly, Solana’s token has taken a beating on this news, dropping from around $100 per token a week ago to around $83 per token after the attack. Yes, Solana has rebounded slightly, to around $87 per token at the time of writing. However, these continued outages certainly don’t paint a very bullish picture for investors looking at this network from the outside looking in.
Let’s dive into what happened, and why I’m still bullish on Solana right now.
Solana’s outage on Saturday appears to be the result of a distributed denial-of-service (DDoS) attack. Essentially, the Solana network was overwhelmed with as many as 4 million transactions per second, with validators on the network buckling under this volume.
Essentially, attackers took advantage of Solana’s unique proof-of-history consensus mechanism. With proof-of-history, validators don’t need to reach consensus at the same time. Rather, using time stamps, transactions can be processed immediately, and sorted later. This allows for greater scalability, one of Solana’s greatest strengths.
While attackers were able to pinpoint weaknesses with this consensus mechanism, Solana has come up with a series of mitigation efforts. Among these, users can opt to pay a nominal fee to have their transaction put in priority sequence. Essentially, this means paying a higher fee could weight a transaction more favorably, and alter the mechanism somewhat. Additional improvements were provides as well.
Overall, I think the Solana proof-of-history consensus mechanism is this network’s biggest strength. And while it clearly provided a weakness (via this attack), it’s possible that the nefarious actors may have engaged in this attack in part due to jealousy. (We saw how the Yuga Labs/Otherside mint went on Ethereum (ETH-USD)).
Speed and cost are two of the most important factors in the crypto world. And on this front, Solana is a leader. Investors looking for tokens to hold long-term may want to consider Solana on such dips. That is, if one believes these outages will eventually be worked out, as I do.
Growing pains are tough, but necessary for growth. Solana is a grower, and I remain bullish on this token.
On the date of publication, Chris MacDonald held a long position in SOL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.