Solana Ecosystem Faces Widespread Trouble
The collapse of FTX is plunging the cryptocurrency market into a crisis—particularly impacting projects connected to it, such as Solana, which is currently experiencing widespread difficulties.
SOL, a token not directly associated with FTX but previously supported by Sam Bankman-Fried, has plummeted to $16.24, down 42% today. SOL has now fallen out of the top 10 cryptocurrencies.
1H Chart of SOL/USDT on Binance as of 5:20 PM on November 9, 2022
The impact is not limited to SOL alone; other tokens within the Solana ecosystem are also suffering. For example, SRM, the native token of the Serum DEX built on Solana and previously advised by Sam Bankman-Fried, has dropped 45% to $0.38.
Additionally, other Solana-based projects such as Raydium, Solend, Mango, and Bonfida are showing signs of weakness amidst the market's freefall. However, FTT, SOL, and SRM are the most severely affected.
Price Movements of Solana Ecosystem Tokens as of 5:20 PM on November 9, 2022, screenshot from CoinMarketCap
The Total Value Locked (TVL) in the Solana ecosystem has also decreased by over 42% in the past 24 hours, according to DeFiLlama.
Solana TVL pic.twitter.com/VUdBRBAwRw
— 0xngmi (@0xngmi) November 9, 2022
It seems that, at this moment, any association with Sam Bankman-Fried and FTX is viewed with skepticism and considered a cautionary sign.
Furthermore, rumors are circulating that a large number of Solana validators have halted staking SOL (47 million SOL, valued at $845 million) in preparation for withdrawals, expected to begin around 3:30 PM on November 10.
UPDATE
— The Data Nerd (@OnchainDataNerd) November 9, 2022
47M $SOL ($845M) will be unstaked by the end of epoch 370 (21h30 later), up from 18M reported earlier.
This is nearly 13% of the circulating supply.
In contrast, only 1,8M $SOL will be staked.
Source: https://t.co/cw22edtXwR pic.twitter.com/ofJTnMehV7
It remains unclear how CZ’s acquisition of FTX will impact the market. Everything is still uncertain following FTX CEO Sam Bankman-Fried’s apology letter to investors for "lack of communication" and failing to provide advance notice of the situation. Meanwhile, Binance CEO CZ has made a latest effort to reassure users amid the FTX debacle, calling on exchanges to provide proof of customer deposits.
