Solana: The Rise and Fall of a Crypto Star

Solana was one of the most hyped cryptocurrencies of 2021, reaching a now unbelievable all-time high of $260 in November.

Solana promised to be a fast, scalable and decentralized platform for running dapps, competing with Ethereum and other smart contract blockchains.

So, what has happened and why did it lose 94% of its value in less than a year?

There are many factors that contributed to Solana's downfall, but the main ones are:

• The collapse of FTX and Alameda Research: These two entities, led by billionaire Sam Bankman-Fried, were the biggest backers and promoters of Solana. They invested millions of dollars in the project, launched the Serum DEX on Solana, and integrated SOL into their platforms. However, both FTX and Alameda went bankrupt in 2022 (oops) due to regulatory crackdowns, legal disputes, hacking attacks and market volatility. This caused a massive sell-off of SOL and a loss of confidence in the project.
• The technical issues and outages: Solana's high speed and low fees came at a cost: reliability and security. The network suffered several infamous outages and glitches in 2021 and 2022, some lasting for hours or days. The most severe one happened in December 2022, when a bug in the proof of history consensus mechanism caused the network to freeze and lose data. This required a hard fork to restore the network, but many users and developers lost trust in Solana's stability and integrity.
• The competition and innovation: Solana was not the only blockchain that aimed to challenge Ethereum's dominance. Other projects like Polygon, Avalanche, Cardano, Polkadot and Cosmos also offered faster, cheaper and more scalable solutions for dapps. Moreover, Ethereum itself made significant progress with its ETH2 upgrade, which improved its speed, efficiency and security.

Solana is certainly not dead yet, but it is not the bright star it once was! It still has some loyal supporters, developers and users who believe in its potential and vision. But it will need to overcome many challenges and regain its reputation if it wants to survive and thrive in the crypto space.

All that considered, it is still a top 10 token by market cap!