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Solana saw a dip in the past 24 hours, with $SOL falling nearly 3% to trade around $79.95. But, the current slip is not just due to weak market sentiment. It is closely tied to a major security attack that has shaken confidence across the ecosystem.
What led to this happened was a highly publicized attack against Drift Protocol, a decentralized finance platform developed on Solana. The attack, which drained nearly $285 million, has raised eyebrows in security practices at the network. Early accounts indicate the attack didn’t come about at short notice. Rather, in all likelihood it’s been executed over an extended period and suggests deeper vulnerabilities than smart contract code. Following the news, investor sentiment soured.
Capital started exodus from Solana-based protocols, and selling pressure mounted. This move is also evident in on-chain data. Locked value across the network has plummeted, dropping from nearly $9 billion to a range approaching $5.5 billion to $6 billion. Such a drop represents a swift and sharp withdrawal of funds, which commonly occurs when trust in a system is broken.
Simultaneously, much $SOL has also been shifted to exchanges. Around 1.4 million tokens worth more than $100 million moved to trading platforms within a short span of three days. This trend usually indicates a readiness to sell but may put more downward pressure on price.
Solana ($SOL) Price Analysis
Technically, Solana is now testing an essential support zone. Traders have focused much lately on the $78 to $75 range. Also, if it stabilizes above this level, this can trigger a consolidation phase. But on another level, a sustained decline below $78 could also open the door to a bigger slump to $75.
Other signals, including the relative strength index, are also moving into oversold territory, so there may be at least a deceleration of the selling wind on the near-term horizon. So even if price action is sensitive, the Solana ecosystem was quick to act.
The Solana Foundation has announced a range of security programs which will help restore confidence in the company’s business operations and also increase infrastructure capabilities.
For e.g., STRIDE, which is a new system designed to assess and monitor security across protocols within the network. STRIDE gives people multiple levels of protection. It offers independent audits, on-going monitoring, and operational security support.
The more important value locked projects will now be subjected to more robust assessments, formalized with verification that demonstrates the foundation’s support. This method is being employed to be able to prevent and take risks at an earlier stage from occurring in the same way in future. The foundation has also built the Security Incident Response Network (SIRN) with STRIDE.
The objective is to enable quicker reaction and improved communication when threats come forward. These events are highly correlated with the most recent exploit. Investigators in the Drift attack have traced its origins to stolen administrative access, rather than in a mere code flaw.
These are all clearly timely moves in an attempt to stem the tide of sentiment. But their effect on price might take time to become apparent. Market participants, for now, are tentative. The focus is on if Solana can maintain its existing support levels and avoid further capital movement.
blockchainreporter.net
