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Amidst the market chaos within the crypto economy and following the climactic FTX collapse, crypto asset solana has been one of the hardest hit in the past 30 days. Since FTX’s fallout, the digital currency has lost 8.5% over the past month against the US dollar, and year-to-date is down 94.9% since the solana all-time high reached on November 6, 2021.
Since the collapse of FTX, crypto-active solana (SOL) has taken a beating, and the digital asset that was once a top ten contender is now close to being pushed out of the top 20 spot in terms of market capitalization. The reason the Solana project has been hit so hard compared to other cryptoassets in the space is because of the project’s deep relationship with FTX and Alameda Research. The project’s team members published a post highlighting the connection when the Solana Foundation wrote about the situation on November 9.
The foundation admitted it had “~$1M in cash or cash equivalents at FTX.com as of 11/6/22 when FTX.com stopped processing withdrawals.” In addition, Solana Foundation held “3.24 million shares of FTX Trading LTD common stock”, “3.43 million FTT tokens” and “134.54 million SRM tokens”. Furthermore, 58.08 million SOL have been sold to FTX and Alameda since 2020. To make matters worse, two forms of Solana-wrapped bitcoin (SOBTC) and Solana-wrapped ethereum (SOETH) have lost their links. FTX was responsible for minting the wrapped tokens and ever since the collapse they have traded well below BTC’s and ETH’s spot market values.
There were also problems with the decentralized exchange software built on Solana, Serum, that developers had to split the project because FTX had control of the project’s “upgrade key.” In addition, the hacker named “FTX Accounts Drainer” had a significant portion (20.28%) of the serum supply (SRM). All of these factors had negatively affected the Solana project, and it didn’t help that Solana suffered significant power outages one month prior to the FTX-related problems. Solana’s rich list statistics don’t help the project much either, as 50 holders own 25.36% of the SOL supply, and 100 holders own 33.90% of the supply. That is a significant number of SOL for 100 owners out of 9,154,449 SOL holders today.
SOL has lost 8.5% in value over the last 30 days, and since November 6, 2021, the crypto asset is down 94.9% against the dollar. Cryptocompare.com calculations indicate that 38.5% of SOL trades on December 16 are paired with tether (USDT). 34.06% of SOL swaps are traded against USD, and 17.44% of SOL trades are traded against BUSD. The most active exchanges today that handle SOL trades include Coinbase, Binance and Digifinex. On November 6, 2021, SOL was ranked fourth in terms of the largest crypto market capitalizations, and today SOL is struggling to hold the 18th position.
Solana’s market performance received even more bad news on December 16 when Solana-based exchange Raydium was leveraged for $2 million. After Raydium discovery highlighted that the $2 million was “connected to ETH,” SOL’s market value fell even more on Friday. By 10:15 am (ET), SOL lost 6.1% against the dollar following the Raydium reports.
What do you think of Solana’s struggles and recent market performance? Let us know what you think about this topic in the comments section below.
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