Solana’s Activity Surge Forces Binance to Suspend Withdrawals on the Network

Binance, the undisputed heavyweight of cryptocurrency exchanges, has encountered a temporary snag in its Solana (SOL) network withdrawals. This suspension, triggered by a transaction volume surge, is being actively addressed by the exchange with a targeted solution expected by March 9th, 18:00 UTC, as per their official announcement.

The announcement reads: “Withdrawals on the Solana (SOL) network have been intermittently suspended since 2024-03-04 due to the increased volume of transactions on the network. Binance has identified areas for optimization and is working to provide a stable and long-term solution. The estimated implementation date of the solution is 2024-03-09 18:00 (UTC).”

While this suspension caused a minor dip of 0.68% in SOL’s price within a 24-hour window leading up to March 4th, 10:40 AM UTC, it’s important to note the token’s positive weekly performance, boasting a growth rate exceeding 17% according to CoinMarketCap data.

It’s worth mentioning that this isn’t an isolated incident. The past week saw several prominent exchanges, including Binance, Coinbase, Kraken, and Bybit, grapple with performance issues. This can be attributed to a perfect storm of heightened retail investor interest in cryptocurrencies and the ever-increasing workload generated by algorithmic trading firms.

Ivo Crnkovic-Rubsamen, Chief Strategy Officer and Technical Lead for Trading at dYdX exchange, shed light on the challenges faced by trading firms: “Because there’s so much retail interest and the price action is moving so fast, all of the algorithmic trading firms are vastly increasing the rate of order placements and cancels they want to send to the matching engine to maintain their positions.”

This surge in trading volume on Binance coincides with Bitcoin reaching a new all-time high above $69,200 on March 5th. Interestingly, despite the recent hiccup, Binance was awarded the Cyber Security Professional Merit Award under the banking and finance category. This recognition, announced on March 6th, makes them the sole Web3 firm to be honored by Hong Kong authorities in 2024.