Solana has been battered under the weight of its association with Sam Bankman-Fried, with the price of its native token now trading firmly at near-two year lows.
SOL has plunged 35% this month and 75% since the FTX saga first broke. It started November beyond $33 — SOL now trades at $9.14 after slipping to single digits early Thursday, reaching a low of $8.30 last night.
It was the first time SOL had seen single digits since February 2021. SOL changed hands for as much as $260 last November, representing a 96% collapse. For scale, bitcoin and ether have both dropped around 75% over the same period.
While Solana itself has no direct connection to bankrupt crypto exchange FTX, the network was loudly championed by its disgraced former boss Bankman-Fried. His trading unit Alameda Research invested in Solana Labs’ initial coin offering for SOL, per Crunchbase.
Alameda Research reportedly held about $1.2 billion in SOL tokens leading up to a crippling bank run on FTX, which led to its bankruptcy.
The situation has impacted The Solana Foundation, a non-profit dedicated to supporting the network’s growth. The group last month disclosed it had about $1 million in cash stuck on FTX.
No SOL was kept on the platform as it stopped withdrawals, the foundation has said, but it had lost:
- 3.43 million FTT ($76.1 million before FTX blew up, $2.9 million now)
- 135 million serum ($180 million then, $18.9 million now)
- 3.24 million shares of FTX Trading LTD common stock (value unknown)
FTT and serum are utility tokens for FTX and Solana-powered decentralized exchange protocol Serum, respectively. Both platforms were founded by Bankman-Fried.
There were also concerns that Serum had been compromised during the odd cyberattacks on FTX just before its bankruptcy. Critical private keys were custodied at FTX at the time, leading developers to fork the DEX protocol to ensure its legitimacy under control of a DAO.
Adding to Solana’s strife, two of its most popular Solana NFT projects, DeGods and y00ts, this week confirmed they’d be migrating to rival blockchains Ethereum and Polygon early next year.
All these stresses have surely weighed heavily on the price of Solana. As crypto markets sag across the board, tokens associated with Bankman-Fried have been hit particularly hard.
But Solana Labs co-founder Anatoly Yakovenko told Blockworks in a recent interview he believes effects of the past few months will eventually pass.
“This is a blip, it sucks, but in the end — four or five years later — barely anyone is going to remember it.”
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