Crypto: Solana Accused of Disguised Ponzi Scheme!

The Solana crypto, often hailed as the “Ethereum killer,” now finds itself at the center of controversy. Accused of hosting a disguised Ponzi-like structure, the network faces allegations of manipulation, raising questions about its decentralization and the fairness of its ecosystem. While vote transactions make up an overwhelming portion of the activity, critics point to a system that seems to favor the most powerful validators at the expense of newcomers. But what is the real situation? Let’s decode the stakes.

A Network Dominated by Vote Transactions

Solana has always been praised for its speed and low transaction fees, two key attributes that have helped it gain popularity.

However, a recent analysis has highlighted a troubling reality: about 85% of transactions on the Solana network are vote transactions. These transactions, essential for the proper functioning of the network, allow validators to secure the blockchain. However, this predominance raises questions about the true nature of the network’s activity.

Behind these numbers, an unequal dynamic emerges. Validators must submit a colossal number of votes to ensure the network’s performance.

For the largest validators, this translates into significant revenue, generated by the transaction fees associated with the voting. But for smaller players, this requirement becomes a financial burden that limits their ability to compete with the validation giants. One might wonder: is Solana just a platform where “the rich get richer”?

A Disguised Ponzi Structure?

The accusations of Ponzi are not insignificant. They originate from a comparative analysis of Solana’s voting mechanisms with the characteristics of a Ponzi scheme. In this type of structure, new participants must continuously inject funds to keep the system afloat, allowing early entrants to reap the benefits.

On Solana, new validators are required to submit a large number of votes to participate in the network, thereby generating fees that primarily benefit well-established validators.

This dynamic creates a significant entry barrier for new validators, thereby reinforcing the power of dominant validators.

This concentration of power is all the more worrying when considering that only 17 validators control 33% of the staked assets on the network.

This “super minority” endangers decentralization, one of the fundamental principles of cryptocurrencies. In short, Solana, under the guise of a decentralized network, could actually be operating as a sophisticated pyramid scheme.

Solana: Transaction Failures and Exorbitant Costs

As Dave points out, beyond the vote transactions, another issue plagues Solana’s reputation: transaction failures. A recent study revealed an alarming rate of 83% of transactions failing on certain protocols of the network, such as the decentralized aggregator Jupiter.

These failures, far from being inconsequential, cost users thousands of euros. For each failed transaction, the transaction fees are still charged, leading to a total of 6,334.4 euros paid by users for transactions that never materialized.

This situation is not only frustrating for users but also raises questions about Solana’s viability for real-world applications.

If a network of this size cannot guarantee the success of transactions, how can it claim to be a viable alternative to more established networks like Ethereum? The crypto community is left pondering Solana’s ability to overcome these technical challenges and restore user trust.