A rush of user activity on the Solana blockchain network is bringing with it some considerable challenges.
Among them is chain congestion so great that it has prompted stakeholders within the blockchain ecosystem to consider major changes to the network’s operations. At the same time, a significant increase in DeFi activity has given way to malicious actors who seek to exploit the network’s low fees at the expense of other users.
In an effort to address the latter concern, Jito Labs, the Solana infrastructure developer, announced Friday evening that it was shutting down its mempool—one of the company’s key offerings—after the service was repeatedly manipulated to enable bot attacks on Solana users during periods of heightened network activity.
While Solana itself doesn’t have a mempool—a waiting room for pending transactions, essentially—Jito’s Block Engine created one to allow users to pursue “maximal extractable value,” or MEV, on the network. So-called positive MEV allows for traders to pay additional fees to the network in order to prioritize transactions, and the practice is commonplace in the world of decentralized finance—and in particular on the leading network for DeFi, Ethereum.
But negative MEV is also all too common. During recent periods of heightened trading activity on Solana, traders took advantage of this window into the types of transactions pending on the network to execute so-called sandwich attacks.
In a sandwich attack, a trader deploys sophisticated bots to execute a pair of transactions—one right before a targeted trade, and one right after. These transactions serve to artificially impact the price of an asset being traded by the targeted user, then sell the difference back into the market, enriching the attacker, and costing the victim. On Ethereum, the practice is generally limited to large transactions—the sort that, for the attacker, make the juice worth the squeeze. But on Solana, because of its relatively low fees, sandwich attacks have been running rampant, affecting traders big and small.
Jito Labs has decided to suspend the mempool offered through the Jito Block Engine due to negative externalities impacting users on Solana.
The decision has been made after deliberate conversations with the Jito Labs team and key Solana ecosystem stakeholders.
— Jito Labs (@jito_labs) March 8, 2024
Jito’s decision to abruptly ax its mempool functionality is meant to improve the user experience on Solana as the network struggles under the weight of thousands of newly minted meme coins and NFTs on a daily basis.
Those transactions are causing congestion on the network, making operations on the blockchain difficult for projects such as Drip—which itself mints hundreds of thousands of NFTs nearly daily for its users.
Late Monday, acknowledging the issue, Solana co-founder Anatoly Yakovenko polled his Twitter followers on whether developers should “aggressively” increase block space on the network, even if that move meant heightening the network’s risk of outage. Just last month, Solana went down for almost five hours, in a PR fiasco that developers said is all-but certain to happen again.
Basically, do we want to add more grills to the kitchen so we can make more cheeseburgers?
If we do this, the cost of cheeseburgers could go down.
However, if we add more grills, we might blow a fuse and the power will go out 💁🏻♂️ https://t.co/ymCHM1eOQe
— solana steve (@solanasteve_) March 12, 2024
By a margin of over 22%, Twitter users voted “no” on the proposal—indicating that for now, considerations of underlying network stability are more important to Solana traders than dealing with congestion, and the problems that come with it.
While NFTs contribute to this traffic—Drip’s founder Vibhu Norby tweeted that the company has “mints that have been pending for 4 or 5 days”—the source of the congestion is overwhelmingly meme coins.
Likely encouraged by the runaway success of Solana meme coins like Dogwifhat and Bonk, users on the blockchain have started pumping out a record number of new such tokens on a daily basis.
3000+ memes launched every day
— toly 🇺🇸 (@aeyakovenko) March 12, 2024
On Sunday, 8,630 new tokens created using the SPL token standard popped up on Solana according to Solscan, an all-time daily record for the network. Yesterday, that figure ballooned to 9,690 new SPL tokens made in a day—yet another all-time high.
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Source: https://decrypt.co/221448/solana-weighs-significant-changes-network-demand
