Solana NFT Protocol Metaplex announces layoffs in wake of FTX collapse

Solana NFT protocol maker Metaplex announced Thursday that it has undergone a company-wide round of layoffs, as the contagion induced by crypto exchange FTX’s collapse last week continues to spread across the Web3 ecosystem.

An undisclosed number of Metaplex employees were rosy today due to deteriorating market conditions for crypto in general, and for Solana in particular, company co-founder and CEO Stephen Hess announced it in a tweet today.

“While our treasury was not directly impacted by the collapse of FTX and our fundamentals remain strong, the indirect impact on the market is significant and requires us to take a more conservative approach going forward,” Hess wrote.

The company did not immediately respond to questions from Decrypt.

Metaplex is the protocol that powers NFTs on Solana, which has taken root as an alternative NFT network to dominant Ethereum. The company started the year on a strong note, and finished one 46 million dollars raise in January funded by the likes of Multicoin Capital, Jump Crypto and NBA legend Michael Jordan.

Months later, in the midst of the bear market, the company launched a native governance token, MPLX, which shortly after its release in September fell in value. Enthusiasm around the Solana NFT space has anecdotally cooled in recent weeks amid debates over royalties for creators, while Solana NFT sales fell sharply in October.

Then, last week, FTX imploded — taking with it all the assets and projects associated with Solana, the pet network of FTX founder Sam Bankman-Fried.

In the days following FTX’s collapse, SOL fell a staggering 60% in value, triple the fee charged on Bitcoin and Ethereum. Although the Solana Foundation—the organization responsible for maintaining the Solana network—did lose tens of millions of dollars in FTX-associated investments, the deep ties between Bankman-Fried and the network seem to have influenced the Solana ecosystem more than anything else.

Bankman-Fried has for years, publicly signalled his strong support for the network, in addition to building prominent Solana-based projects such as Project seruma decentralized central.

Furthermore, FTX built a Solana-centric NFT platform on which many such collectibles stuck nowunavailable during the stock exchange’s bankruptcy proceedings.

Metaplex’s layoffs announced late Thursday are yet another data point in the myriad ripple effects of FTX’s collapse that still need to be accounted for. Even without direct financial exposure to the exchange, the reputational damage sustained by FTX and its founder appears to be wreaking havoc in seemingly isolated corners of the crypto industry.