The development team of the Solana crypto project has released updates to address some issues related mainly to blockchain congestion.

In particular, Solana Labs has released the new version of the mainnet v1.17.31.

.@Solana MainnetBeta validators: the v1.17.31 release is now recommended for general use. This patch contains enhancements which will help alleviate some of the ongoing network congestion, and will be followed by further enhancements in v1.18.

Please upgrade when there’s less…

— Anza (@anza_xyz) April 15, 2024

This is a patch for the validator nodes that contains several improvements that will help alleviate some of the ongoing network congestion. It will also be followed by another patch with additional improvements in version v1.18.

Crypto: The problems of the Solana blockchain

The Solana blockchain is based on Proof of History (PoH).

This methodology is adopted by validator nodes to validate a large number of transactions in a short time, and with very low costs. 

However, nodes also use staking, which allows holders of the SOL cryptocurrency to earn a return in SOL by creating a staking account.

This complex architecture aims to be able to validate a very high number of transactions in a short time, higher than those blockchains based only on Proof-of-Stake such as Ethereum.

Nevertheless, the Solana network rarely exceeds 2,000 transactions per second (TPS).

In the past there have been days when we reached almost 4,000 TPS, but since the end of February we have not exceeded 3,000 anymore, and in the last few weeks it has been rare to exceed 2,000.

These are still significantly high numbers, higher for example than those of Ethereum on-chain, but they may not be sufficient in times of particular congestion. 

Having very low transaction costs, on the Solana blockchain it is also cheap to record microtransactions, and this increases the number of transactions that are executed, and therefore recorded on the blockchain. 

Due to the increase in transactions involving memecoins and other tokens, the Solana network has been virtually constantly congested for over a month now, to the point that 70% of transactions without fees fail. 

The solution to Solana blockchain’s crypto problems

The temporary solution to the problem is the patch contained in the new version 1.17.31 of the mainnet released last week. 

Actually, it doesn’t seem to have had a significant impact on the issue, because the percentage of transactions without a rating that failed is still around 70%.

The real solution should come with the new v1.18, but its release has been postponed by a few weeks. 

The issue is that the Devnet on which developers were testing the new version 1.18 last week crashed, slowing down the development and testing process. 

It should not be forgotten that Solana is a crypto project that was born only four years ago, and that had its real big boom between the end of 2022 and the beginning of 2023, with a spectacular 2023. 

The price of SOL

The price of its native cryptocurrency, SOL, in 2021 skyrocketed from $1.5 to $260 during the last major bull run, only to drop back to $9 by the end of 2022.

However, in 2023 it made another real boom, bringing itself back above $120. 

2024 saw an initial period of small correction, followed by a new boom up to over $200. 

The all-time high of 2021 has not been updated yet, and during the month of April the price dropped to $130, before rising back above $150. 

However, taking as reference the price just before the beginning of the last bull run, which was in October 2023, from those $22 the accumulated gain up to today is 600%.

These are truly remarkable performances, although not yet able to surpass the peak of three years ago. 

However, it is possible that the unresolved congestion of the last few weeks may have hindered the growth trend of SOL’s price, perhaps also due to a new potential competitor. 

Competition

What seems to be Solana’s biggest potential competitor to date, namely Telegram’s Toncoin, claims to be able to handle up to 100,000 TPS without any issues, compared to Solana’s current 2,000 TPS. 

Furthermore, Toncoin’s marketing team seems to be taking inspiration from Solana’s initiatives in this regard, which have allowed them to achieve a remarkable 2023. 

Over the past 12 months, the market capitalization of SOL has gone from 8 to 90 billion dollars, then dropped in the last few weeks to 59 billion. In the last few days, it has risen to 69. 

Instead, the value of TON, the native cryptocurrency of Toncoin, went from less than 3 billion dollars to almost 19 billion, and then rose even further to over 25 billion just as SOL’s value dropped from 90 to 59.

Instead, in the last few days, while SOL’s market cap rose from 59 to 69 billion dollars, it dropped from 25 to 21. 

In other words, throughout 2023 and the first two months of 2024, the two trends seemed to be not related at all, and were both driven by the positive trend of Bitcoin. 

However, starting from this month they have started to be apparently inversely correlated, since the marketing team of Toncoin has launched some new initiatives inspired by those launched by the Solana team from the end of 2022 until the beginning of 2024. 

For now, the gap is still very clear (69 billion dollars in market capitalization for SOL, compared to 21 billion for TON), but the competition seems to have already started.