Vitalik Buterin, the co-creator of the second-largest blockchain Ethereum, mentioned via a Thursday tweet that he hopes the Solana network thrives despite its current struggles with its blockchain business.
In his tweet, the Ethereum boss said that “some smart people” informed him that the Solana development team comprises intelligent individuals. He then declared his hopes for the struggling blockchain ecosystem:
“Hard for me to tell from outside, but I hope the community gets its fair chance to thrive.”
Within 10 minutes after Buterin’s tweet, the price of SOL jumped by over 15%. SOL is the native cryptocurrency for the Solana network. After dropping as low as $8.14, 1 SOL traded at $9.63.
SOL Lost 96% from ATH
Despite the mild increase in the price of SOL, the token has recorded an overall loss of 96% of its value from its price at an all-time high (ATH). In November 2021, SOL saw a peak value of $258.
Since then, the asset has been on a steady decrease. For most of 2022, the SOL token retained a price mark of $30 to $40.
However, with its current price at $9.56, the SOL token now sits on a loss of more than 96% of its peak value. Cryptocurrencies that have lost this much value in 2022 are the Terra ecosystem tokens, LUNA and UST, and crypto exchange FTX’s FTT token, among others.
Why is SOL Going Down?
The troubles faced by the Solana ecosystem are likely tied to several factors.
One of them is the downtimes that have plagued the network for some time. These downtimes occur when the Solana network is unavailable to process transactions until the issue is fixed. In some cases, the fault is caused by a bug in the network’s program. The most recent of such faults occurred in October.
Another issue that contributed heavily to the poor performance of the Solana blockchain business is the ties the ecosystem has with Sam Bankman-Fried (SBF).
At the start of November, the insolvent state of SBF’s crypto exchange FTX and its sister companies came to light. As the FTX empire crumbled, several crypto entities connected to it began struggling with their businesses.
The Solana ecosystem is not left behind as the SOL token dropped from its $30 price mark to a mark of $15, representing more than a 50% decrease.
Around the same time, several dominant projects existing on the Solana network reduced their dependence on the network by exploring other blockchains. Some even plan to leave the Solana ecosystem entirely.
These factors have contributed heavily to the downtrend that has plagued the so-called Ethereum killer, Solana.
