How Solana is fixing outages, and the challenges it will tackle in 2023

2022 has been a particularly turbulent year for Solana (SOL). With the announcement of the collapse of the now-defunct crypto exchange FTX in early November, the price of SOL plummeted 55% over the month.

SOL was trading at $11.15 as of press time, down 70% from its November top of $37.73. Solana was last trading at this price in February 2021. Furthermore, according to CryptoSlate data, the price of SOL has declined 94.21% in the last year and is down 95.71% from its all-time high in November 2021.

During the FTX debacle, the total value locked (TVL) in Solana decentralized finance (DeFi) plunged 63% in a week. Solana TVL was valued at $330 million on November 14 after losing about $500 million in a week, but it has since dropped to $214.53 million as of press time, according to DefiLlama data.

Solana was an early supporter of Sam Bankman-Fried (SBF), the disgraced former CEO of FTX who is currently out on bail facing criminal trial for fraud. According to Forbes, SBF-owned hedge firm Alameda Research held 53 million SOL tokens as of late August.

Solana's drop was fueled by rumors that Binance was considering buying out FTX. Analysts expected that if Binance was taken over, it would favor its own Binance Smart Chain and BNB (BNB) coin over Solana, sending investors into a selling frenzy. Binance, on the other hand, finally backed out of the arrangement, prompting FTX and Alameda to declare bankruptcy on November 11.

In June, the Solana Foundation, Solana Labs, Multicoin Capital, FalconX, and Solana co-founder Anatoly Yakovenko were named in a class action complaint. According to the lawsuit, Solana was centralized, and the defendants benefitted from the sale of an unregistered security while making false representations.

Yakovenko recently spelled out what the network is working to address matters and its primary emphasis areas in 2023 as the network seeks to recover.

Solanas ongoing focus

Fixing network outages

Long before the FTX fiasco, Solana experienced recurrent network disruptions in early 2022. While the frequency of outages decreased in the months that followed, it remained to have an impact on investors. The Solana network experienced a more than 24-hour outage on January 21, coinciding with a market dip. As a result, some traders' holdings were liquidated.

According to the Solana uptime tracker, Solana experienced 14 outages in 2022, totaling 4 days, 12 hours, and 21 minutes of downtime. It should be noted, however, that the tracker did not record the downtime confirmed by the network's official Twitter account on November 9.

The network outages and slowdowns were largely caused by congestion, while Yakovenko stated that the disruptions in early 2022 were also caused by a series of glitches. While some of the flaws were new, others appeared as a result of increased network usage, according to Yakovenko.

As a result, the Solana engineering team's primary goal in 2022 has been to resolve network disruptions while also boosting reliability and resiliency. Yakovenko stated during Solana's annual conference, Breakpoint 2022:

“I would say that the Solana engineering team has spent the last year focusing on reliability. And I believe we've solved a lot of it.”

Solana announced in August that Jump Crypto, a subsidiary of quantitative trading firm Jump Trading Group, would develop a new validator client for Solana. According to Solana, the Firedancer validator project would propose significant network changes and increase Solana's efficiency, reliability, and throughput.

Solana claims that Firedancer can handle 600,000 transactions per second (TPS) in a test environment, compared to the network's current average of 4,000 TPS.

Solana has also redeployed its User Datagram Protocol (UDP)-based system to handle transactions on top of QUIC, a Google-developed protocol. Solana's resilience is increased by QUIC's fast asynchronous communication.

Solana has also implemented stake-weighted QoS, which “prevents unstaked or low-stake nodes from spamming everyone else,” according to Yakovenko. Solana has also created local fee markets, which allow users to pay extra to have their transactions prioritized for confirmation, so increasing network reliability.

Boosting performance

Solana's technical team has created certain turbine modifications that are functioning behind the scenes to increase the possibility of immediate information transmission. Furthermore, Solana is working on runtime optimizations. This included an upgrade to Solana's Sealevel runtime, which Yakovenko claims has already increased transaction throughput.

He also stated that Solana engineers are still working on two significant challenges: the transaction scheduler and then replaying those transactions. Yakovenko mentioned:

“The answers are improving all the time, and heuristics are getting much closer to being the best they can be.”

Improving security

A hacker stole an estimated $8 million in SOL and USDC from 7,767 hot wallets in early August. Solana wallets including as Solflare, Phantom, Slope, and Trust Wallet were affected by the hack. The hack was also alleged to have affected some Ethereum (ETH) investors.

While network security is critical for the safety of user payments, Yakovenko believes it is also critical for widespread acceptance. According to Yakovenko, the growing number of Solana validators has increased the network's security and resistance to censorship. Nearly the last 24 hours, there have been 1,911 Solana validators, but 30 validators control over 33% of the whole stake.

Yakovenko pointed out that widespread deployment of Solana would necessitate even more security upgrades. This could imply providing automatic audits as a security feature to assist developers in detecting smart contracts and development flaws and faults. He continued:

“The more automation we can implement, the more resilient these systems can become.”

Enhancing programmability

Yakovenko explained that making Solana more programmable entails adopting tools like as compilers that enable a wide range of developer languages. Solana already has a Solidity compiler known as solang. In addition, Solana's development framework, Anchor, has become more user-friendly for developers, he said.

Yakovenko highlighted that with these improvements and upgrades:

“Last year, we switched from chewing glass to surfing glass.”

The recently launched Seahorse application allows developers to construct Anchor programs in Python, extending Solana's programmability even further.

Increasing mobile compatibility

According to Yakovenko, cryptocurrency is mostly desktop-based since Web 3.0 business models are incompatible with those of major app stores. Making cryptocurrencies available through mobile applications, on the other hand, is critical for wider acceptance. According to Statista data, over 82% of the global population, or approximately 6.6 billion cellphones, are in use.

According to Yakovenko, app stores are not friendly to crypto decentralized applications (dApps). And dApps that have been approved by app stores must include additional procedures for consumers to connect their wallets. He continued:

“It's a significant challenge, not only for the network, but also for the user experience and developers.”

Solana Mobile's Solana Mobile Stack was created to address these issues. The seed vault, for example, leverages the phone's built-in security element to store seed phrases, rendering them unavailable to Android and allowing dApps to quickly connect with wallets, according to Yakovenko.

Furthermore, the Solana dApp Store, which will open for applications in January, will be a permissionless marketplace for mobile dApps, according to Yakovenko.

Solanas 2023 focus

Solving key programmability challenges

Solana intends to publish Token-22, a new token standard that will enable the development of new applications such as royalties on transfers and ownership, as well as confidential payments.

Furthermore, the network is working to make formal verification a reality, for which tools are already in place, according to Yakovenko. He continued:

“My aim is that at next year's Breakpoint, I'll be talking about open source smart contracts with formally verifiable specs, so that auditors can look at the standard and tell you where you're missing an assumption, or an assumption is not possible to verify.”

The network is also working to enable type-rich bitcode, which might potentially remove the hurdles that prevent Solana applications from calling one other. According to Yakovenko, this would allow Solana full composability, such as transferring messages across different services.

One of the primary issues Yakovenko wants Solana to address is network state and dynamic storage cost. While Solana has already optimized the network with hardware, Yakovenko believes that additional scaling will be required when the number of accounts hits 5 or 10 billion.

He also stated that the Solana team has yet to determine how to price storage. He stated:

“We don't know what the next account's value should be next to the validators, or how to ensure that storage is used properly.”

Tackling network-level improvements — ‘Slimming down Solana’

Yakovenko wishes to provide lite clients, which would allow users who do not have access to a full validator node to study a tiny sample of data. Light clients, dubbed “diet clients” by Yakovenko, might assist protect the network and certify that the majority of nodes are proper, he claimed. Yakovenko refers to the goal of enabling light clients as “slimming down Solana” because the proofs on Solana are significantly larger than thin protocol layers.

Furthermore, Yakovenko wishes to decouple the act of producing blocks from that of running a validator node at the network level. He stated:

“This enables the actual block producers to be somewhat stateless and not require the most synced state, allowing them to focus all of their energies on this extremely gnarly, real-time knapsack problem of building blocks.”

This might be accomplished with the deployment of bankless leaders, resulting in a significant increase in network stability and latency, according to Yakovenko.

Yakovenko also plans to implement APEX in 2023, which would separate the tasks of playing and assessing blocks from picking forks. This would reduce the need to cope with fluctuating and decreasing web traffic needs from validators. Yakovenko stated,

“Once you pick a fork, you know the execution and the outcome. And if we succeed, it means that you can have actual program execution run a full epoch behind fork selection. That provides you enough transactions to last two days.”

According to Yakovenko, all three solutions will improve network security and performance.

Enabling multiple concurrent block production

Concurrent block manufacture is what Yakovenko refers to as the “mother of all tricky bombs.” For Solana to be able to construct a real-time historical record of occurrences around the world, information must be transmitted instantly. Furthermore, it would aid in determining who discovered the information first.

As a result, it is critical to eliminate network latencies. According to Yakovenko, this may be accomplished with many concurrent block generators because it would provide various venues to validate transactions. This is distinct from sharding, which divides big databases into smaller portions, as Yakovenko pointed out, adding:

“We continue to have a single state machine, a single unified picture of what the state is. We merely have different ways of encoding that past.”

According to Yakovenko, all of the aforementioned enhancements and updates would help make decentralized systems as fast, dependable, and safe as centralized systems.

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