Very few coins hit 2022 running like Solana, promising lightning like speeds, low transaction costs and decentralisation. It’s been one of the fastest growing eco-systems within the crypto space with thousands of projects like De-Fi, Web3 and NFTs.
However, as time went on, it has faced more scrutiny with claims of centralisation, down-time and an unfair pre-mine. So, is Solana a good investment? Let’s take a closer look.
Providing cheaper tokens to Venture Capital with only a 9 month lock up
A fair criticism of Solana is that its pre-mine was unfair. While most crypto projects have a pre-mine or an ICO (Initial Coin Offering), Solana’s was particularly large. Even more so when you compare it to Bitcoin which had no pre-mine, rather equally allowed anybody to mine it.
The team behind Solana raised over $200 million and pre-mined over 50% of the total supply. 42% of this went to Venture Capitalists AT A LOWER COST THAN RETAIL. This came with a dismal 9 month lock up period, after which they slowly proceeded to dump on retail all while having a good laugh about it.
It takes a fucking supercomputer to run a node and the Foundation has a TON of stake in the ones that operate
To run a node it takes a computer with AT LEAST 128gb of RAM to run a node (they recommend 256gb of RAM, not disk space, RAM). The cost of this is upward of $2k which means it already disadvantages anyone outside the luxuries that the western world offers. Compared to a Raspberry Pi which can run an Ethereum node for less than $100, this is orders of magnitude more expensive.
On top of that The Solana Foundation has a TON of stake in nodes that are a part of the Foundation delegation program. It’s close to 100,000,000 SOL staked this way.
These nodes are not “run” by the Solana Foundation, they are all run by independent people who applied to the program. But they are almost completely staked by the foundation, and the nodes have to follow rules of the foundation or lose their stake. These rules are aimed at keeping those nodes running well and improving the quality of the network.
But still, this means that all these nodes are serving one master in the end. They have to follow the Foundation’s rules or lose their stake. That makes them less independent than a truly independent node should be.
It has experienced 12 outages … and counting
The beauty of cryptocurrency is that in theory, it runs like clockwork. Solana on the other hand seems to experience outages regularly, which insane considering its centralised nature. One of the outages was caused by a spam of bot transactions (due to the very low transaction costs of Solana) which exhausted the computing power of the nodes, which caused the centralised validator community to ‘restart’ the network.
The latest outage, which happened only months ago on June 1st(2022), shut down the network for four hours and 10 minutes, was the result of a lack of new blocks being produced – key to keeping the Solana blockchain operational. According to the Solana Beach block explorer, validators ceased processing new blocks for five hours, and were told to restart their systems by the Solana Foundation.
This is why, Solana, despite any positive price movement is a terrible long term or stable investment. It’s almost as though EOS (Google it!) got re-incarnated to fleece retail under a new name with catchy marketing. We recommend you DO NOT INVEST IN SOLANA.
If the above did not convince you, I once again leave you the video of Solana VC investors, laughing about dumping their tokens on retail. If that doesn’t change your mind, nothing will.