QUICK TAKE:

• Solana faced significant transaction issues in April due to a surge in memecoin launches and speculative projects.
• An April 15 network upgrade aimed to reduce congestion but has only partially succeeded.
• Current data shows a 59% drop rate for non-vote transactions, an improvement from April’s 75%.
• Real-time testing revealed mixed results, with some transactions succeeding quickly and others failing repeatedly.

Solana, known for its high-speed and low-cost transactions, has been grappling with persistent network congestion issues. In early April, the network experienced significant transaction failures, largely due to a surge in memecoin launches and speculative projects. Despite a recent network upgrade, the problem continues to affect users, raising questions about Solana’s scalability and reliability.

The April Congestion Crisis

The root of Solana’s congestion woes lies in its appeal: low fees and fast transaction times. These features attracted a flood of memecoin projects in early April, overwhelming the network. Users reported slow confirmation times and difficulties in getting their transactions included in blocks. This congestion highlighted the network’s vulnerability to high-volume, speculative activity.

The Network Upgrade

On April 15, Solana implemented a network upgrade intended to alleviate congestion. The announcement generated optimism within the community, with many believing the worst was over. However, over a month later, the improvements appear modest. Blockworks Research reports that approximately 59% of non-vote transactions are still being dropped from blocks. While this is better than the peak drop rate of 75% experienced in April, it indicates that significant issues remain.

Real-World Testing

To understand the user experience, I conducted a series of real-time transactions on the Solana blockchain. First, I converted some Solana (SOL) into the JitoSOL liquid staking token using Jupiter and then deposited the JitoSOL into a liquidity pool on Raydium. These transactions were processed quickly, with network fees remaining under $1.

Next, I attempted to swap SOL for the Jeo Boden memecoin on Raydium. It took several attempts, but the transaction eventually succeeded on the third try. This process earned an A- in terms of user experience.

However, when trying to purchase a dog-themed memecoin on Pump dot Fun using the BONKbot Telegram trading bot, the transaction repeatedly failed. The bot indicated that the network was congested and suggested increasing the transaction fee to improve the chances of success. Attempts to buy the memecoin directly on Pump dot Fun also failed, as the token’s price plummeted to zero during the setup process—a reflection of the volatile and speculative nature of the market.

The Role of Bots

On-chain analysts suggest that many of Solana’s failed transactions can be attributed to arbitrage bots spamming the network with trades. My experience supports this, as routine transactions were generally successful, whereas speculative trades struggled. Tom Wan, from 21Shares’ parent company, used Dune Analytics to show that over 92% of failed transactions in a week in March were made by bots, defined as entities conducting more than 5,000 transactions per day. This indicates that while bots heavily impact the network, they also account for a large portion of transaction failures.

The Path Forward

Solana’s transaction issues have been a concern since the current bull cycle began in December. Solana Labs has introduced several patches since April, but co-founder Anatoly Yakovenko acknowledges that a major release might require up to 30 patches. This ongoing need for updates highlights the challenges of maintaining network stability amid rapid growth.

The Firedancer Upgrade

The Solana community is looking forward to the Firedancer upgrade, a new validator client developed by Jump Crypto. Firedancer aims to significantly increase the network’s throughput. At Solana’s recent Crossroads conference, Yakovenko estimated a 50% chance of Firedancer being deployed on the mainnet before the Solana Breakpoint event in September. This upgrade is seen as a critical step towards resolving the network’s congestion issues.

Conclusion

Solana’s journey through network congestion and transaction failures underscores the growing pains of a rapidly expanding blockchain. While recent upgrades have provided some relief, persistent issues remain. The role of bots in exacerbating congestion is evident, and user experiences vary widely based on transaction types. As the community anticipates the Firedancer upgrade, the hope is that Solana will emerge more resilient and capable of handling increased demand. The network’s ability to address these challenges will be crucial in maintaining its position as a leading cryptocurrency platform.