Jun. 26, 2025
Crypto Education Specialist and Advisor with Know Before You Crypto: Key Risks: Solana has had a history with outages and degraded performance. I believe it’s in the best interest of the public to wait for the new validator client, Fire Dancer's, full release to ensure diversity in validator clients to prevent potential network outages, improve decentralization, and lessen the likelihood of a single point of failure. The last major outage was in February of 2024, when the network was down for nearly 5 hours and stopped producing blocks. However, the network has had degraded performance as recently as February of this year as well during the release of the TRUMP memecoin, where we saw severe network congestion. Solana is a newer blockchain which requires more stress testing to ensure it can handle the volume once an ETF is approved. Numerous incidents, such as the blockchain losing track of time, has raised concerns amongst the crypto community about whether the network is actually decentralized. Not to mention, the time when 1,000 validators went offline after cloud service provider Hetzner blocked server access. The network needs to align more with decentralized cloud providers to mitigate a central party taking down the network or having numerous nodes offline again. Solana is mentioned as an unregistered security in several SEC lawsuits against prominent crypto exchanges. Calling into question why the ETF is up for consideration if the SEC has already classified it as an unregistered security. This appears to contradict the agency’s former stance and the Howey Test framework. Although Solana has had an ICO & presales, I do not believe that should bar the project from ETF approval. I would hope that projects that had ICOs or pre-sales prior to the Telegram Court case ruling and the discontinued use of SAFT contracts in the U.S. are not classified as unregistered securities. I do believe since the SEC approved Ethereum’s ETF due to its “decentralized nature,” despite having ICO’d, that the same standard should be applied to Solana. When comparing the number of validators Ethereum has to Solana, it is not even close in terms of network support and stability. I do also recognize that the network having fewer validators may improve speed, but based on the current volume performance, Solana needs to strengthen the network to handle the increased transaction volume as the network grows, which is why I believe that this project is not ready for “Prime Time.” There are other ETFs like Litecoin, Polkadot (High Nakomoto Coefficient), and Cardano that have been around longer and/or have better network reliability that warrant ETF approval. Litecoin has never had an ICO, has had 0 outages since inception and uses quantum safe/quantum resistant cryptography. Litecoin is more on par with the likes of Bitcoin and Ethereum than Solana is. Solana needs to go at least 3 years without network outages to ensure the safety of investors. I believe the network has done great work to improve the network over the last 3 years. I just believe it needs more time to build the network to the standard that is needed for institutional grade investment products. Lastly, the pending class action lawsuit claiming that Solana Labs is an unregistered security needs to be addressed before an ETF can be approved. The SEC needs time to review the arguments in the case to make a complete determination if investors were misled and if Solana is indeed an unregistered security. Since the core function of the SEC is to protect investors, rejecting or delaying further consideration of Solana ETF applications would be in the best interest of all parties. Sincerely, Courage Kimber KB4UC Sent from my iPhone