Solana Nearly Halted Finalization Due to an Outage

cryptonews.ruPublished on 2026-08-12Last updated on 2026-08-12

Abstract

On August 12th, a routing failure at infrastructure provider TeraSwitch caused approximately 90 Solana validators, representing 28.83% of staked SOL, to go offline simultaneously. This brought the network dangerously close to the 33.34% threshold at which transaction finality would halt, stopping the blockchain. The incident, highlighted by Marinade Finance, lasted about 33 minutes before routing was restored. The affected validators missed out on roughly 333 SOL in rewards during the downtime. The event underscored significant risks from infrastructure concentration, as TeraSwitch alone managed validators with 27.34% of the total staked SOL prior to the outage. Marinade Finance stated it would revise limits on validator distribution across autonomous systems and data centers to improve resilience. Some major operators, like Coinbase, already distribute infrastructure across multiple providers with backup servers to mitigate such single points of failure. The incident echoes a 2022 event where provider Hetzner, hosting ~40% of validators, disconnected nodes, though the network remained operational.

On August 12, due to a routing failure at infrastructure provider TeraSwitch, validators accounting for 28.83% of staked $SOL went offline simultaneously. This brought the network close to the 33.34% threshold at which it would have stopped finalizing transactions. This was reported by the Marinade Finance project team.

1/ Solana got 86% of the way to a halt this morning and it barely registered anywhere.
28.83% of staked $SOL went delinquent. Finality stops at 33.34%.
We added up the rewards lost across all 90 affected validators. 333 $SOL. pic.twitter.com/EEC2gYwQgz

— Marinade 🛡️ (@MarinadeFinance) August 12, 2026

The incident affected about 90 validators. The autonomous system TeraSwitch AS20326 accounted for 118.9 million $SOL, or 27.34% of the network's total stake. During the outage, 94% of that amount went offline simultaneously.

The critical level was ultimately not reached. Routing was restored after approximately 33 minutes, and the validators returned to the network. During the downtime, they missed out on about 333 $SOL in rewards.

Outage Highlights a Significant Problem

Marinade called the incident an example of infrastructure concentration risk. The project will review the limitations on distributing validators across autonomous systems, data centers, and backup infrastructure.

The problem existed even before this incident. As of July 22, TeraSwitch served validators with approximately 27.1% of staked Solana tokens. It was followed by UAB Cherry Servers (12.7%) and Latitude.sh (11%).

Source: Validators Solutions.

Some major operators already distribute their infrastructure across multiple providers. In its Q1 report, the Coinbase exchange stated that 13 of its validators operate via TeraSwitch, with another 10 via Latitude.

For each, the company also uses a backup server in a different location. The trading platform's team explained such a setup as necessary to limit the impact of a single provider's failure.

Recall that in November 2022, German hosting provider Hetzner turned off servers with Solana nodes. At that time, its infrastructure supported about 40% of validators with roughly 20% of the total staked coins. The network continued to operate.

In January 2026, the number of active Solana validators dropped to 800 — the lowest level since 2021. At the peak in 2023, there were over 2,500.

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Related Questions

QWhat happened to the Solana network on August 12th, and what was the critical threshold almost reached?

AOn August 12th, a routing failure at infrastructure provider TeraSwitch caused approximately 90 validators with 28.83% of staked $SOL to go offline simultaneously. This brought the network close to the 33.34% delinquency threshold, beyond which transaction finality would have stopped.

QWho reported the incident, and what financial impact did it have on the affected validators?

AThe incident was reported by the Marinade Finance team. The affected validators lost an estimated 333 $SOL in staking rewards during the approximately 33 minutes of downtime.

QWhat core issue within Solana's infrastructure did this incident highlight according to Marinade Finance?

AAccording to Marinade Finance, the incident highlighted the risk of infrastructure concentration. They plan to review limits on validator distribution across autonomous systems, data centers, and backup infrastructure.

QWhat was the market share of TeraSwitch in Solana staking before the incident, and who were the next largest providers?

AAs of July 22nd, TeraSwitch hosted validators with approximately 27.1% of staked Solana tokens. The next largest providers were UAB Cherry Servers (12.7%) and Latitude.sh (11%).

QHow does Coinbase mitigate the risk of a single infrastructure provider failure for its Solana validators?

ACoinbase mitigates this risk by distributing its validators across multiple providers (e.g., 13 via TeraSwitch and 10 via Latitude) and operating a backup server in a different location for each validator.

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