Solana (SOL-USD) is doing a security overhaul, which includes ending the mempool to combat MEV exploits. Bad actors and insufficient security on some networks are unfortunate risks in the cryptocurrency space.
Solana is a high-performance blockchain platform known for its fast transaction speeds and low fees. It is designed to support decentralized applications and cryptocurrencies at scale. Despite network disruptions and downtime, SOL’s performance keeps investors and traders bullish.
Addressing the Mempool Challenge
The decision to terminate the mempool functionality, which stores unconfirmed transaction information, resulted from exploitative trading practices undermining trading fairness within Solana’s network. While absent in Solana’s core design, Jito Labs introduced this feature, inadvertently opening the door to front-running attacks that have plagued many users, particularly retail investors attracted by Solana’s low transaction fees.
The move to end the mempool functionality underscores a comprehensive strategy to combat Maximum Extractable Value (MEV) bot exploits. Such exploits have not only affected Solana but are a known issue in blockchain ecosystems, including Ethereum (ETH-USD), albeit with differing implications due to the varied architecture and fee structures.
Technical Insights and Market Dynamics
From a technical analysis perspective, Solana’s daily chart shows clear signs that bulls have struggled despite the recent rally. The daily candlesticks for Friday, Saturday, and Sunday have consistently been unable to pass the $145 value area, indicating a significant resistance level for the price of Solana.
Further compounding the technical outlook, the Composite Index and the Detrended Price Oscillator have revealed a bearish divergence, with the Composite Index notably crossing below its slow-moving average – a bearish warning signal, indicating that momentum may be shifting away from the bulls.
However, not all signals point towards a bearish future. Despite a bearish divergence, a hidden bullish divergence has also emerged, particularly noted by how close the Detrended Price Oscillator is to the zero line. This suggests that the opportunity to reverse the bearish sentiment and trap bears in an unfavorable position could be on the horizon.