Solana wipes out almost $1.5 billion in a week as network-related hacks mount

Decentralized finance (DeFi) asset Solana (SOL) is recording significant capital outflow, with the network facing various challenges, including hacks and system outages. The incidents appear to limit Solana’s potential to take over established platforms like Ethereum (ETH).  

In particular, as of October 13, Solana had a market cap of $10.6 billion, representing a drop of over $1.43 billion or 13% from the $12.08 billion recorded on October 6, according to CoinMarketCap data. 

Solana 7-day market cap chart. Source: CoinMarketCap

Although Solana’s sharp drop in market capitalization correlates with the general downturn in crypto markets, the asset is affected by the increasing related network exploits that have accelerated in recent months. 

The latest drop comes after Solana-based DeFi exchange Mango Markets was hit with an exploit of over $100 million. The incident saw the hackers manipulate price oracle data, which enabled them to take out under-collateralized cryptocurrency loans.

It is worth noting that this is the second hack related to Solana in barely two months. As reported by Finbold on August 5, a Solana software wallet hack also resulted in a loss of at least $4.5 million.

Solana’s outages 

At the same time, the network has suffered several outages that appear to deter investors. The most recent outage was recorded on October 1, lasting at least six hours. Overall, in 2022 alone, the network has suffered at least five significant outages, with some running into days. 

Besides the network issues, the Solana team continues to pivot the assets as an ‘Ethereum killer’. In this line, the network is undergoing significant developments resulting in key milestones, like hitting over one billion transactions since the platform’s launch in 2020

Notably, the transaction milestones validate Solana’s status and potential in the crypto market since the metric appears unfazed by the network issues. At the same time, the transaction aligns with SOL’s founding principles of supporting instant transactions at a low cost. 

In the meantime, the price of Solana is also trending in the red zone following the recent hack. By press time, the asset was trading at $29, having corrected by almost 6% in the last 24 hours. 

Ultimately, analysts maintain that for Solana to realize its potential, the outage issues must be handled. The situation continues to doubt the network’s ability to hit high performance. 

Source : finbold

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