Understanding the Recent Solana Forking Event, SOL Price Trades Sideways at $22.83

• The Solana network has been in a deep freeze on Saturday as validators prepare a second attempt to restart the blockchain.
• For chain users, their on-chain crypto assets are immovable, frozen in place until strong backend infrastructure returns to service.

Solana, a blockchain that uses the Proof-of-Stake (POS) Consensus mechanism to validate its transactions and generate new blocks experienced a slowdown in block production on Feb 25 after an upgrade in the validator software.

Validators are nodes on the Solana network that are responsible for validating transactions.

The issue caused the network to “Fork” this means that there were conflicting versions of transactions history that caused a decrease in the network’s transaction throughput and an increase in validators’ RAM usage which effectively froze all on-chain activity on the network.

To clarify, the incident happened around 00:53 New York time and by 02:00 the network could process only 93 transactions per second (TPS), this is s significant drop from the usual 5000TPS rate.

The cause is yet to be demystified but network developers suspected it to be a bug in the new version. Some validators went ahead and began downgrading to version 1.13. However, this was not enough to restore Solana to normal operations, and the decision was made to restart the network on v1.13.6.

A network restart involves shutting down the entire network and bringing it back online with the latest version of the software. 

The most recent occurrence is compared to similar technical issues that took place on the Solana blockchain in 2022. At the time, the network experienced a series of halts and slowdowns which then prompted the reforms of how Solana manages its inbound traffic.

Solana tries turning it off and on again (twice)

February 25, 2023https://t.co/gWvXZpLiZQ pic.twitter.com/1szgdErQuK

— web3 is going just great (@web3isgreat) February 26, 2023

According to validators interviewed by a media outlet CoinGape, the issues arising from sluggish transaction processing have escalated into a near-total shutdown of Solana. Block production has ceased, and no transactions are being processed or validated.

Related: KNOW YOUR CRYPTO: SOLANA

Solana has been championed by its supporters as an “Ethereum killer” because it offers lower transaction costs and faster processing speeds. The blockchain supports different types of crypto applications including lending, trading, and nonfungible tokens. Among its most stalwart champions was Sam Bankman-Fried, the founder and former Chief Executive Officer of the bankrupt FTX exchange.

At the time of publication, the Ethereum-killer token is trading close to its 24-hour low at $22.81 recording $410 million in trading volume. It remains to be seen whether a resolution of the forking event on the Solana blockchain triggers a recovery in the price. Solana is down nearly 14% in a week, with trading volume also falling massively.