- The Solana community discusses a potential hard fork in response to legal troubles.
- The hard fork proposal has divided the community.
- SEC’s enforcement, as well as FTX’s bankruptcy, loom over Solana’s future.
As Solana’s blockchain faces troubles from all sides, the community is discussing a drastic measure. A hard fork, would split the blockchain and its community, but potentially save Solana from regulatory trouble and its FTX ties.
After the SEC designated Solana as a security, and following a weak response from the Foundation, the Solana community was in a state of disarray. As the token’s price slides, many in the community are looking for a solver bullet to end Solana’s troubles.
Solana Hard Fork: End to All Woes?
The Solana community is currently embroiled in discussions about a potential hard fork of the Solana blockchain. This comes in response to the SEC enforcement action and the collapse of FTX and Alameda.
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The discussions about the hard fork started, on Saturday, June 10. This was when one DeFi investor identified as @capsjpeg on Twitter started a poll to gauge the community’s response to the idea.
@capsjpeg suggested that a hard fork would protect Solana from potential regulatory actions by the SEC. Moreover, it could also prevent the potential dumping of SOL tokens following FTX’s bankruptcy proceedings.
According to the poll results, 39.9% out of 2,050 respondents supported a fork in Solana, while the rest were against it.
Solana’s Hard Fork and SEC’s Binance Lawsuit
In its lawsuit against Binance on June 5, the SEC has labeled Solana’s native token, SOL, as a security. This has led to many exchanges, such as Robinhood, delisting SOL, which has negatively impacted SOL’s price.
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Some in the Solana community believe that a hard fork could potentially alleviate the SEC’s scrutiny. The idea is that a fork could create a new version of the blockchain that the SEC did not yet designate as a security.
Still, the SEC’s crackdown on crypto is accelerating, which is why others criticized this argument. According to critics of the proposal, it is unlikely that a fork would save Solana from the SEC.
Solana and FTX Bankruptcy
Another issue looming over Solana is the FTX bankruptcy. FTX’s trading arm Alameda Research currently owns 8.2% of all staked SOL supply. As both companies are in bankruptcy, there are concerns that they might dump these tokens on the market, causing the price of Solana to plummet.
A hard fork could potentially prevent this scenario by creating a new version of the SOL token that is separate from the original tokens held by FTX. If the community moves to this new version of the token, the original tokens held by FTX would become irrelevant. This way, their sale would not impact the price of the new tokens.
Still, there are considerable issues for the hard fork plan, and many in the community are questioning its feasibility. For one, the hard fork would likely split the SOL community between two tokens, potentially a loss-loss scenarios for both.
Additionally, a new token resulting from the fork would likely require a new name and branding, which comes with its own challenges.
What is a Hard Fork?
In the context of blockchain technology, a hard fork is a significant change to the underlying rules of a blockchain protocol. It’s akin to a divergence in the road, creating a new path that follows a different set of rules.
When a hard fork occurs, it starts a new version of the blockchain, and all participants in the network must agree to update to it.
Does Solana Have to Change the Name if it Forks?
New tokens created as a result of the hard fork do not necessarily have to have a new name. However, they often do this to avoid confusion.
The new name typically signifies that it’s a different version of the original token and operates under a different set of rules. However, the decision on naming is ultimately up to the community and the developers behind the hard fork.
On the Flipside
- It is not clear whether a hard fork is a realistic prospect, as the proposers have no clear plans for it.
- The Solana Foundation, the main contributor to the Solana ecosystem, did not address the idea of a hard fork.
Why This Matters
Discussions about Solana’s hard fork highlight the dissatisfaction among its community over the state of the network.
Read more about the community backlash against the Solana Foundation:
Solana Foundation Faces Backlash for ‘Weak’ SEC Response
Read about some positive developments in the Solana ecosystem:
