1 Lesson to Remember from Solana’s Déjà Vu Moment

by Beth Canova
By Beth Canova

Groundhog Day may have been last week, but Solana (SOL, “B”) had a déjà vu moment of its own this week.

Yesterday, Solana — the Layer-1 that has been dominating headlines this bull market for its outstanding performance — went down for roughly five hours, forcing all on-chain transactions to come to a screeching halt.

The outage sent the price of SOL down 4% before it mostly recovered. The Solana Foundation said a new software patch fixed the immediate problem.

This hiccup might seem odd for a blockchain as strong as Solana, known for its cheap and fast transactions. But looking back in time a little further reveals the network’s past struggles.

Indeed, this isn’t the first time Solana has come to a standstill. In fact, it’s the 11th in the past two years. And despite having uninterrupted uptime for the preceding 351 days, this disruption is stirring concerns about Solana’s lack of decentralization. 

And it’s making some people question Solana’s status as an Ethereum (ETH, “A-”) killer.

But not us.

That’s because we never saw it as one to begin with. In fact, we don’t believe there is such a thing as an Ethereum killer.

We believe the crypto market is big enough to support multiple blockchains with various capabilities, scaling solutions and use cases.

In short: There is no one-size-fits-all approach to crypto.

In fact, I wrote something similar earlier this year ...

Just look at the two leading Layer-1 smart-contract blockchains at the moment: Ethereum and Solana.
If you think Solana is going to replace Ethereum, think again. We’ve already had hype around “Ethereum killers” fade away several bull markets ago.
Instead, you should think about these leading Layer-1 blockchains like the giants of the smartphone industry.
Solana is like Apple. 
Its methodology mirrors Apple's approach by integrating hardware with software to achieve excellence. This emphasis on precision — exquisitely fine-tuning the hardware to enhance software performance — leads to efficient, high-quality output.
Solana also demands technical sophistication to ensure alignment with the company's vision of a high-performing exclusive network. But this means running a validator node on the network, which requires significant technical expertise.
On the other hand, Ethereum's strategy resonates more with Android's ethos. It favors a universally accessible, software-centric approach.
Spearheaded by cofounder Vitalik Buterin, Ethereum envisions a platform where anyone, anywhere can participate as a validator with nothing more than a smartphone.
This inclusivity parallels Android's flexibility. In both cases, the software is designed to operate across a wide range of hardware, prioritizing accessibility and widespread adoption.
Just as the smartphone market can support both Apple and Android because of their differences, the crypto market is likely to recognize value in diverse approaches.
Ethereum’s and Solana’s contrasting strategies underline this diversity. And each is carving out a unique niche in the blockchain ecosystem.
[…]
As the industry evolves, it's becoming clear that a multilayered approach might be the key to managing the ever-growing demands on blockchain networks.

So, let this be your belated Groundhog Day reminder that if a diverse, multilayered approach is key to crypto’s success, then it just might have a place in your portfolio strategy, as well.

And indeed, this is good news for investors. Not only does portfolio diversity give you more chances to go for impressive gains, it also helps mitigate downside volatility.

So, when setting up your portfolio for the next big bull market rally, don’t limit yourself to only following one narrative. Or only picking one crypto to play that sector.

Instead, keep up with our Weiss Crypto Daily updates to learn about the narratives shaping the crypto market and which projects are pushing those narratives further.

Best,

Beth Canova

About the Contributor

Beth Canova is a veteran of the publishing industry, specializing in cryptocurrency-related information and guidance. As the Managing Editor of some of world’s most astute cryptocurrency experts — Juan Villaverde, Dr. Bruce Ng, Marija Matić and others — she's continually immersed, and well versed, on everything crypto.

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