On September 14, the Solana network went down for over 17 hours. During the outage, Coinbase, Binance, and other exchanges suspended trading of SOL, locking up over $10 billion. Solana (SOL) ($47 billion market cap) had recently tripled in market cap, but in the days following this outage Solana lost over 20% of its value and has been slow to rebound.
Crypto projects can "go public" through an initial DEX offering (IDO), which is like an initial coin offering (ICO) but on a decentralized exchange (DEX).
According to Solana, the outage was caused by bots flooding the Solana network during an IDO on Raydium (RAY). These bots performed 300,000 transactions per second, which Solana could not handle. Apparently, a fix for this issue was already under development.
When the network was overloaded, Solana's engineers couldn't fix the issue using the current software release, so Solana upgraded and restarted the network.
Crypto engineers and investors tend to dislike projects with centralized control, but engineers continue to choose Solana due to its extremely fast transactions and low fees. This outage calls into question the reliability of Solana and all the projects built on it. Solana claims it will perform a thorough investigation of the outage and prevent similar issues in the future.