FTX’s rapid debacle has caused widespread pain for the crypto community, but certainly not close to that of the Solana community. Since November 6th, Solana’s token (SOL) price has plunged by just over 63%, making it only second to FTX’s native token, FTT, which is down over 93%.
Many believe that Solana’s fate was sealed by FTX’s ex-CEO Sam BankMan-Fried’s close association with the proof-of-stake blockchain. Over the past 2 years, Solana had rapidly risen to become one of the largest blockchains thanks to Fried, who was both a massive investor and voice for the ecosystem.
Earlier this week, it emerged that Alameda and FTX owned 58.08M SOL tokens, representing nearly 11% of the SOL total supply, raising fears of a dump. Those holdings placed Bankman-Fried at the center of much of Solana-based decentralized finance, enraging investors who have been emptying their bags.
On Thursday, Solana’s woes only seemed to worsen, with Binance temporarily halting all deposits of USDC and USDT on the Solana blockchain. Earlier, OKX had announced it would delist both USDC and USDC on Solana and suspend deposits and withdrawals. That said, following the filing of Chapter 11 bankruptcy protection by FTX, regulators may extend their reach to tokens which had close ties with the exchange, further plunging SOL.
“Steady Lads” Developers Tell Users
Nevertheless, despite SOL’s plunge, developers have been keeping users engaged on positive milestones as they try to revive the network’s fading enthusiasm.
On Wednesday, the Solana Foundation noted that it would not sell or transfer approximately 12.5M SOL which it plans on un-staking over the next two epochs stating that they will instead be “re-staked on new nodes.” In theory, these actions can convince investors that the SOL will not be dumped, acting as a liquidity shield against large sellers.
On November 17, Coinbase Cloud, one of the largest hosts for Solana Validators, tweeted that “the network has been upgraded to fix the issues that led to prior outages.” According to the service, the network had run under meaningful load over the past two weeks, which was a testament to the efficacy of those upgrades. A recent tweet also showed Solana’s builders had grown to over 3,700. One of the biggest successes of 2022 is in the Solana NFT community, where over $3.6b in primary and secondary sales have been made so far.
SOL was trading at $13.42 after a 1.67% drop in the past day and a 94% drop from its all-time high. SOL’s market cap tumbled from almost $80 billion last November to just under $5 billion, according to CoinMarketCap data.