DeFi Safety, an independent DeFi rating organization, has ranked Solana as the second-worst according to the firm’s technical criteria.
Axie Infinity’s, the popular play-to-earn gaming platform, Ronin blockchain has been ranked as the worst, according to DeFi Safety. Ronin was hacked for $600 million in March 2022.
The Montreal-based agency has rated over 240 Decentralized Finance (DeFi) protocols and 15 different blockchains.
DeFi Safety’s blockchain reviews include five-different criteria: node count and their diversity, supporting software, documentation, as well as testing and security, according to their blog post.
“DeFi Safety does not perform code audits,” explains Defi Safety on its about page. “Instead, we review the quality of process and documentation behind the code, of which audits are only a part.”
Why is Solana rated low?
DeFi Safety’s primary reasons for such a low rating revolve around Solana’s poor node infrastructure and frequent downtimes.
Other reasons include improper handling of archival node information, poorly designed block explorers, and unaudited node clients (software) with less diversity than competing blockchains.
DeFi Safety raised concerns about the lack of details regarding the network’s node archival, or the process of storing all of a blockchain’s data since its inception.
4/28 It is still unclear where the chain stores its history – there have been no documented updates on the Solar bridge after archives were abandoned.https://t.co/g9fW2Lvsfc
— DeFiSafety (@DefiSafety) June 7, 2022
There is no clear documentation on node archival except a year-old Reddit thread from Anatoly, co-founder of Solana, according to the ratings firm. Still, Austin Fedora, head of communications at Solana, said that this isn’t necessary for Solana.
“Solana does not require knowledge back to genesis to validate a block,” Fedora told Decrypt.
As for node clients, DeFi Safety argues that Solana simply doesn’t have enough offerings. A node client is software that helps users connect their computers to a blockchain network in order to validate and execute transactions.
Currently, Solana offers just one piece of software for its node operators, which has not been audited since 2019, claimed DeFi Safety. Ethereum, for example, offers seven different execution clients and six consensus clients.
“Only one node implementation; this is accurate and valid,” said Fedora. “Solana Foundation is working to diversify validator clients.”
According to the report, Solana’s native block explorer, Solscan, also leaves much to be desired, especially when compared to that Ethereum’s Etherscan.
“Several top-tier block explorers are being built by the community the majority of which are less than 18 months old,” Fedora told Decrypt. “In that time, their UX and functionality have greatly improved to meet the needs of builders and users.”
The report also stated that some Solana validators had begun censoring transactions. But Solana Labs denied this as well and called it synonymous with miner extractible value (MEV) in Ethereum. MEV is any ancillary revenue that a miner can earn beyond winning block rewards and earning gas fees by changing the order of transactions.
“The power in any network rests in the validators,” Fedora told Decrypt. “This discussion [DeFi Safety] was referring to was among several validators in the discord channel. The foundation has no power to censor any transactions.”
“We agree with Solana that Solana does not censor transactions. However, there was discussion of it,” Nick Sheaf the co-author of the DeFi Safety report told Decrypt.
“Solana is impressive and fast and beautiful but boy could things be done better,” he concluded.
How reliable is the report?
The evaluation behind this report is based on criteria set out by DeFi Safety.
Notable DeFi protocols including Uniswap V3 (96%), Compound Finance (93%), Aave (94%), and Bancor (96%) are highly rated for their improved transparency and safety.
The ratings project also gave Terra’s Anchor Finance a safer product rating (75%) than Solana, which collapsed due to the protocol’s architectural failure.
Defi Safety also published a report on Badger DAO as 99% safe in September 2021, which was later hacked for $120 million in December 2021.
The primary reason behind the deviation is that the Defi Safety report is based on the project’s smart contracts. Instead, Badger Finance’s user interface was exploited.
Report on Badger Finance. Source: Defi Safety.
Solana’s price action
Solana (SOL), the 9th-largest cryptocurrency with a market capitalization of $13.8 billion, is slightly up over the past day, trading at $39.09.
SOL is nonetheless down a whopping 85% from its all-time high of $260.06 recorded in November 2021, according to data from CoinMarketCap. Indeed, many of the top cryptocurrencies have shed huge amounts of value since the market’s back last year.
The total value locked (TVL) on Solana is at $3.77 billion, up 1.07% over the past 24 hours, according to data from DefiLlama.
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