Solana rapid decline amid FTX’s fallout

Solana, popularly dubbed Ethereum’s killer, dipped rapidly following the FTX collapse. As per the market overview, SOL lost more points than every other asset class. 

Solana dipped

Initially, Sam Bankman-Fried applauded the coin and its blockchain for its seamless efficacy. Furthermore, he asserted that Solana provided unquantifiable utility to its users. Hence, this quality made it a suitable and solid foundation for projects to build on.

But soon after FTX got plagued by bankruptcy, Solana experienced an abrupt downshift. The coin lost 53.8% over the last few days since the meltdown kicked off. Meanwhile, compared to SOL, ETH lost 20% while BTC 19%. 

Stefan Rust, the CEO of Laguna Labs, a blockchain wallet company, affirmed that Solana took more hit from the FTX downfall than any ecosystem. Stefan and others opined that FTX and Alameda dumped their SOL reserve to recoup losses.

Many investors and developers are exiting the mainnet due to its recent adversity. Solana was a home for decentralized finance (DeFi) projects and applications. The number of tokens used downsized to 24.74 million from June’s 68.2 million, per DeFiLama data.

FTX and Alameda probe 

When probed regarding the recent developments, FTX and Alameda Research refused to discuss the situation. Meanwhile, Anatoly Yakovento, Solana’s co-founder, tweeted that Solana did not stash any assets in FTX. Anatoly added that the company had enough liquidity to keep operating for the next thirty months.

Raj Gokal, also a co-founder of the blockchain company, asserted that Solana is undergoing a crucial turn of events. Meanwhile, it is not the first setback it will experience; the chain becomes stronger each time. Regardless, there is a lot of FUD around the chain despite being once referenced as the Ethereum killer due to its efficiency over Ether.

Adam Struck, the founder of Los Angeles-based Struck Capital, said Solana is not at the end of the road. Time and time again, it has proven itself as a survivor and a rival to Ethereum. So, there is a silver lining even if the asset has a poor valuation at present.

Jack Saracco, a co-founder of Ping, stated that it is a good thing for SOL that its relationship with FTX is dissolved. However, while the aftermath might linger a while, there are better days ahead for the blockchain. 

Jack further alluded to the stability of stablecoins, especially Tether, on the market. According to him, Tether demonstrated much more resilience than anticipated. He added the Stablecoin is stronger than imagined and may outlast many winters.