Can the Solana ecosystem "comeback" after the collapse of FTX/Alameda Research?
If there is a blockchain project that has been hit the hardest by the collapse of FTX, it is Solana. Both the crypto community know that Sam and Alameda Research personally have been the “backers” of Solana since its inception. Most of the prominent coins of the system are also "favorably" listed on the FTX exchange.
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Of course, when this backer collapses, the impact on the Solana ecosystem is indisputable. So Solana still has the ability to "comeback" or not? Does the project still have potential? Let's find out with FoxCryptoNews!
The Link Between Solana and FTX/Alameda
The relationship between Solana and FTX/Alameda has many "rooted strings" that we can categorize into 4 clues as follows:
- Token SOL;
- Solana's DeFi Ecosystem;
- Alameda's investments in Solana projects;
- The Solana Foundation's assets are held on FTX.
How is the Solana ecosystem affected?
About SOL . token
The Alameda Research Foundation originally owned 58 million SOL tokens, equivalent to 11% of the project's total supply.
It is not clear how many tokens the Alameda fund still owns and how much it dumped. Because of such "ambiguous" nature, when news of FTX collapse spread, the community quickly "invited" each other to short, sell out SOL leading to most SOL tokens plummeting.
About DeFi on Solana
As FoxCryptoNews reports, nearly $700 million has been wiped out of the Solana ecosystem.
The most typical DeFi project of the system is DEX Serum, which was founded by SBF himself . Fortunately, in later developments, Serum received support from the Solana community, so the influence of SBF gradually decreased.
Currently, Serum plans to fork the project in order to get back the private key that is controlled by FTX, thereby giving 100% rights to devs and the community. Thanks to this news the price of SRM increased by more than 100%.
About FTX/Alameda investments
It can be said that SBF and Alameda created the Solana system as the name of an indispensable VC fund in most of these projects. This was once a "pride" of the community of SOL lovers, but now it has become a "ghost" that causes everyone's anxiety.
Typical projects that SBF has reached "octopus faucet" to such as Coin98, Maps.me, Oxygen, PsyOptions, etc. In which, Oxygen and Maps.me have difficulty because FTX holds the majority of tokens and claims to be searching. legal aid.
It is incorrect to consider OXY and MAPS as a “typical example” of the consequences left by FTX, because these two projects have been inactive for many months.
The collapse of FTX only "pours fuel on fire", accelerating the progress of "going to the end" of projects that have stopped working.
For projects that are really trying to BUIDL through the downtrend season, the community should be alert to consider. The investment of VC in the project has 2 forms as follows:
- Project token, with vesting and without vesting;
- Shares of the project. It should be noted that most crypto companies currently have no IPOs, so there are no publicly traded shares.
When FTX goes bankrupt under Chapter 11, the court will assign a representative to liquidate the exchange's assets. Both the token and the number of shares of the project invested by FTX will be listed as assets to be liquidated. Usually, the sale of liquidated assets is done via OTC for tokens and sold cheaply to the holding company.
Thus, even at the “most pessimistic” perspective, FTX-invested projects will face a token sale – but have the ability to know in advance to “hedge” – rather than lead to a crash. dump the whole project.
Solana Foundation assets on FTX
FTX was once a very popular exchange, so it is understandable that many projects reserve their funds on the exchange. The fact that assets "incarcerated" cannot be withdrawn from FTX is an inevitable consequence.
The Solana Foundation has announced that it has 1 million USD that cannot be withdrawn on FTX, which is less than 1% of the fund. Should consider that number of assets at 0 does not affect their operations too much.
The intrinsic power of the Solana system is still there
That is enough to see that Solana was severely affected by the FTX incident. But that doesn't mean there's no possibility of recovery – even if it will be for a long time.
Solana is not some “anonymous sub” project but a Layer-1 that has a certain place in the market. A large community of devs, marketers, and builders, who develop in the spirit of decentralization, not just dependent on "direction" from FTX.
Co-founder Solana Labs has confirmed on Twitter that they have enough assets to operate continuously for 30 months. Of course, this information is not 100% true, but we can still have some peace of mind.
Besides DeFi, NFT on Solana is also extremely bustling. Magic Eden is still the leading NFT marketplace platform, trying to attract users and cash flow to this system.
Of course, the future ahead for Solana is extremely difficult. Downtrend, broken domino chain from FTX or loss of trust from the community, etc. All of these will be challenges that Solana projects will have to face.
Nov 17, 2022