FT Cryptofinance: Solana loses its shine

Anyone who carried out projects on Solana was able to process none of their transactions while the network had failed.

Apparently this is quite embarrassing for a network that has advertised itself in response to a problem that would enable blockchain technologies to compete with the size and reliability that demonstrates traditional financial institutions every day.

Bitcoin is designed to process blocks about every 10 minutes. The costs tend to rise sharply if many people want to use them. This makes blockchains unusable for mass acceptance by consumers. Solana promised to handle 50,000 trades per second, a magnitude that could compete with the credit card operator Visa or the NASDAQ exchange, while the costs still remain with a fraction of a cent.

But reliability problems on Solana become a kind of habit. Thousands of linked crypto accounts were emptied in August in an obvious hack. According to the data from CryptoCompare, Solana was not available for 6,422 minutes this year, which corresponds to more than four days. Admittedly, the majority of this time are due to a failure in January, but this month it was already six hours. In contrast, Nasdaq was over 99.9 percent of the time this year.

After the failure last week, the Solana users on social media took air with a mixture of anger and resignation. "As usual", "Complete the chain" and "no need to post something. We are aware that Solana goes offline every few weeks."

The alleged scalability of Solana attracted the traditional financial industry. One of the more striking forays of Wall Street in crypto technology is Pyth to collect and distribute the data on stocks, conventional currency, crypto and raw material transactions for decentralized trade.

The data was delivered by high frequency dealers such as Jump Trading and DRW Cumberland and stock exchanges such as IEX and LMAX. Pyth is built on Solana.

Only this week has the Chicago Appointment Exchange CBOE GLOBAL Markets agreed to deliver data to Pyth. As helpful as this may be, it only shows how far Solana is away from being "the visa of cryptography".

Great financial institutions like to use it as a live test site for their own crypto ambitions; It is low -risk, but does not directly contribute to income or threatens them.

But if a new technology such as blockchain is supposed to displace existing financial systems, it has to offer something better than what was previously.

What do you think of Solana? Will it ever take off or is the game over? Mail me to scott.chipolina@ft.com .

Weekly highlights

• The Securities and Exchange Commission continues its march against crypto and compares the charges with the celebrity Kim Kardashian for promoting an “Ethereum Max” token. The social media influencer and prominent A-Lister agreed to pay penalty fees of $ 1.3 million, but did not give them the results of the Sec.

• The great resignation of crypto continues. The co -founder of Celsius Network, Daniel Leon, has resigned. This week, my colleague Kadhim Shubber revealed that former Celsius boss Alex Mashinsky deducted $ 10 million from the bankruptcy lender before freezing customer accounts.

• Binance became the youngest this week in a very, very long series of crypto-hack victims. Early reports indicate that the exploit has caused losses worth $ 100 to $ 110 million. Read our story here.

• Europe has tightened the existing crypto bans against Russia in the course of its extensive invasion in Ukraine. Now all wallets, accounts and deposit services are prohibited for crypto-assets regardless of the amount held.

• The FBI warned of “pork slaughter”. It is not a form of cruelty to animals, but usually includes that fraudsters contact social media or dating applications and gain their trust before convincing the victims to make deposits in fraudulent cryptosystems.

Soundbite of the week: "Harnest what you sow", says the unhappily died terraform boss

In the past few weeks, Do Kwon, head of Terraform Labs, has happily claimed on social media that he is not hiding (but without revealing his whereabouts) and even suggested to go for a walk.

This week his tone changed when he was asked for a report that South Korea frozen almost $ 40 million of his crypto capacity. He claimed that history was an "falsehood" and an example of why Krypto was popular in countries that armed state institutions against their own people.

"Harvest what you sow - revolutions start from the inside."

data-mining

The USDC stable operated by Circle has lost market capitalization in the past two months. It is now $ 46 billion compared to $ 55 billion in July.

The market capitalization of Tethers Usdt and Binances Busd, the other two large stable coin players in the industry, both rose in the same period.

An important macro point: the dollar interest is now higher than ever in the crypto era. US treasuries offer about 4 to 5 percent and stable coins nothing. In a crypto crash world after the crypto crash, Fiat can simply be the more convincing option.