In a possibly sarcastic tweet, a Twitter user by the handle R89Capital pointed out the intriguing nature of Solana, comparing its use cases to its price history.
You are actually witnessing history with $SOL. No network has achieved the scale and usage of #Solana and then gone down -96%. It's extraordinarily impressive!
— R89 (@R89Capital) December 27, 2022
Solana has been on the news for a while, not for the best reasons. On the 27th of Dec 2022, @R89Capital on Twitter pointed out that Solana has achieved a scale that no other network has reached to date, and the use cases for the network are innumerable.
Solana achieves its capacity of offering fast, safe, and scalable blockchain performance by combining the famous proof of stake (PoS) consensus with its new proof of History (PoH) clock synchronization technology and several other improvements.
But it’s also one of the worst victims of the massive crash caused by the FUD surrounding FTX and Sam Bankman-fried. On the weekly charts, the coin lost 42%, with SOL investors flocking to other projects that can provide long-term prosperity.
According to DeFillama, the total value locked in Solana fell by 27% within days of the crash to $456 million, which continued dropping. While most of the crypto market suffered heavily from the crisis, Solana’s proximity to the FTX crash in early November hurt more than just its image.
Solana started the year 2022 very strong as the favored network for releasing non-fungible assets after Ethereum. But it lost around 96% of that value because FTX and its investment arm, Alameda Research, were instrumental in Solana’s expansion.
Referencing data from the Solana Compass, Alameda, the sister company to FTX had around 50 million SOL locked and staked on December 21. That figure represented 66% of all locked Solana and 11% of all staked SOL. Sam Bankman-Fried’s involvement in Solana went beyond just investment. His exchange also established a marketplace for Solana-based NFTs.
Uncertainty over the future of the network, with such an enormous amount of sol tokens in the hands of one entity, has caused the cryptocurrency to tumble from number 10 to number 17.
After the crash, word moved around that the millions’ worth of SOL were going to the liquidators. For some users, this meant another dumping spree was underway, leading to even more value lost, with little hope for recovery.
As of now, users believe that the Solana network is massively undervalued, suffering from the actions of VCs out to make a profit at all costs.
Yet, this is history being made. We are waiting to see what 2023 holds.
