Solana, a public blockchain platform that has ambitiously pitched itself up against Ethereum, has put users off with its weekend outage and high network congestion. It also crumbled under overload.
Bots have been blamed for Solana’s setbacks. Laine, a software and blockchain company, highlighted that liquidators on Solana-based DeFi protocols created bots to overload the network. This stopped users from topping up their collateral. As such, it resulted in the liquidation of collateralized positions. To get leverage on such platforms, users have to provide collateral to ensure they won’t default on the loan.
A user claimed that because of the liquidations, they have lost SOL 500. The user tried to repay the loan for over eight hours but every transaction failed and was eventually liquidated.
Laine said the collateral ratio should not fall below a certain mark. When prices fall, users have to top up collateral to avoid getting dissolved. Liquidators reap benefits from liquidation as they get a bounty for it. The company reasoned this as to why liquidators took over the Solana DeFi projects and overloaded the networks. They created a bloodbath across the Solana blockchain. Laine said many leveraged positions on DeFi become eligible for liquidation because of market volatility.
To get in first and emerge as winners, the company says liquidators submitted the same transaction hundreds of times. The transactions were compute intensive and weren’t always valid. It got forwarded on from one leader to the next again and again.
Solana in a Twitter post said the network was flooded by complex-compound-instruction transactions. The public blockchain company attributed the problems to the network’s growth to be among a new class of sophisticated builders and users. Solana is working on the issues and plans to release more developments within the next couple of weeks.
It hopes the new releases, many of the features are live on testnet, will improve the state of the network.