On Jan. 21, 2022, when crypto markets were plummeting, "Ethereum killer" Solana saw a terrible network outage. However, not all users of its ecosystems were sad about the outcome.
How to make six digits on Solana's problems
Mr. Eminger has taken to Twitter to explain the causes of Solana's collapse and emergency solutions proposed by the community and Solana Foundation.
(0/11) ? about what happened during weekend and solutions used by @solana team and validators for dealing with these issues ? pic.twitter.com/DaXhRuJc9a— Tomáš Eminger (@EmiT87) January 25, 2022
According to him, when the SOL price started its dropdown, many traders who borrowed U.S. Dollars using SOL as collateral, were liquidated as the collateral's price was lower than 120% of the amount borrowed.
Liquidators started to sell positions and return borrowed money to get a 5% "liquidation bonus." This "arbitrage" opportunity motivated some liquidators to run automated bots.
These bots made about $400,000, as calculated by the founder of Solana-based DeFi platform Solend. To accelerate this process, some bots started sending transactions not through RPC but directly to the transaction processing unit of the validator responsible for this or that block.
Now it is all fixed
To be sure about the transaction execution, traders started a) double-sending the transactions, and b) targeting the most influential validators.
As such, the biggest validators suffered the most.
To prevent this from happening again, versions 1.8.14 and 1.8.13 of Solana's node software were released immediately.
As U.Today reported previously, Solana's outage was slammed by Ethereum's cheerleaders.