After a 2019 network freeze, the Stellar network has been hit by yet another crisis. According to data that has been made publicly available, it was unable to process transactions for hours.
XLM Price is Plummeting
Stellar’s official update shows that some critical validators have been dropped out of the network by an unexplained technical failure. As of 13:26 UTC, engineers from the Stellar Development Fund(SDF) examined the technical problems that led to the validators dropping off. The blockchain cannot also process new blocks since validators are currently offline.
Currently, the update given by the network has confirmed that they don’t know when they will fix the issue, for the transaction system to go back to normal. Users noted the last transaction took place over 10 hours ago.
In the meantime, Bitstamp cryptocurrency exchange has temporarily stopped XLM, the native token of Stellar, deposits and withdrawals due to continuing issues. The token price has dropped from $0.57 to around $0.49 ever since the news.
As we have already established, the ongoing incident is not unprecedented for Stellar. In 2019, the network froze abruptly, and for two hours, transactions became difficult to verify. Though nodes of the Stellar Development Foundation were not responsible for the downtime, it exposed the Stellar blockchain network’s fragility. In Bitcoin or other PoW blockchains, such downtime would be unthinkable.
Current syncs among validators to keep a network running depend on complex encryption and Stellar is nothing different. Small software bugs, however, can cause intermittent disturbances.
An additional example is the Solana blockchain, which in December 2020 was similarly confronted by a 6-hour shutdown.
Coinbase to Investigate the Issue
As the bug is being fixed, Coinbase has confirmed that they are looking into the matter. In March 2019, Stellar (XLM) was listed on the Coinbase exchange network.
The U.S. Securities and Exchange Commission approved Coinbase on a Nasdaq list last week, representing a tacit regulatory acceptance of trading on its website cryptocurrencies. The move is a win for digital currency advocates.
Instead of an initial public offer, the San Francisco-based firm plans to start trading by 14 April. After the IPO was repressed in March, the firm implemented the U.S. Commodity Futures Trading Commission.
In its last week of Nasdaq trade in the private sector, Coinbase was estimated at around $90 billion. A direct listing will make the company available to the public.
Amid regulatory uncertainties, Coinbase last week announced that it was setting up an Indian office after rumors of an Indian administration preparing to ban cryptos.