- In the event of a major market crash, the TradFi platform will face downtime.
- The Solana network is resilient despite past issues.
- Solana has previously struggled with extreme volatility in trading.
The recent market crash, which saw Bitcoin drop below $50,000, has created frenzied activity in both the cryptocurrency markets and traditional financial institutions (tradFi). Such times test the reliability of blockchain networks and traditional web infrastructure. This time, blockchain networks have performed better.
Despite having suffered technical issues in the past and multiple network-level outages over the past few years, Solana has performed strongly during the recent crash, while major banks like Schwab and Fidelity have seen their services plummet.
TradFi is down due to market crash
The massive financial panic caused chaos in the markets. On Monday, August 5, a massive selloff in Japan caused the Nikkei index to fall 20% from its all-time high on July 11. The cryptocurrency market responded similarly, losing 18% of its total market cap, with Bitcoin falling to $50,000.
The asset price decline also led to a surge in trading activity in both crypto and stock markets, as traders rushed to liquidate their positions or sell before others did. The surge in activity was so overwhelming that major TradFi platforms such as Charles Schwab, Fidelity Investments, Citi, and Robinhood all experienced downtime on their online services.
At the same time, major blockchain networks, including Solana, have remained robust despite the rapid increase in transaction volume. This is particularly noteworthy since Solana has experienced several outages in the past.
Solana Remains Strong Despite Past Problems
Solana has faced several serious outages in recent years that have impacted its stability. A notable incident was an outage in February 2024 caused by a bug in the Just-in-Time (JIT) compilation cache, which resulted in an infinite loop that halted network operations for nearly five hours.
In October 2022, a misconfigured node caused problems with Solanaâs consensus mechanism, resulting in another long-term downtime. Similarly, during the launch of the DeFi protocol in September 2021, a surge in transaction volume overwhelmed the network, causing a 17-hour outage.
The root of these issues is the significant increase in network traffic due to spam and bot trading, mimecoin trading, and DeFi applications, which is not a problem for tradFi. This constant pressure on the network has led the Solana team to implement numerous upgrades that make the network more resilient. On the contrary, this has made it more resilient to market panics compared to the tradFi platform.
On the other side
- Last year, Solana demonstrated improved reliability by achieving 99.94% uptime.
- As Solana continues to grow, it will once again hit scalability limits unless it continues to make improvements.
Why this matters
The robustness of trading platforms is critical to maintaining fairness in financial markets. When these platforms go down, this lack of accessibility is what hurts retail investors the most.
Learn more about Solana’s network issues.
Why do Solana transactions fail? Developers are struggling to fix it
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