The recent FTX crash has severely affected the crypto market, but the Solana network seems to have been more badly hit than other platforms, losing over 70% of its TVL from November 7 to date.
No blockchain has been hit harder by the FTX fallout, than @solana
Here's a summary of:
-How Solana was impacted
-Why it could make a comeback
If you're involved with Solana, this is a MUST READ 🧵 pic.twitter.com/9gHSVGfwXQ
— Alex Valaitis (@alex_valaitis) November 15, 2022
Solana and the exchange, which had a good rapport before the collapse, are now at risk of collapsing due to their close connection.
Sam Bankman Fried, the CEO of FTX, had been a significant backer of Solana, investing in over nine projects on the platform from 2020 to 2022.
FTX, which was one of the largest exchanges in the industry, processing over $10 billion in transactions daily, filed for chapter 11 bankruptcy on November 11.
Before that, the platform was accused by a US agency of mishandling customers’ funds and committing fraud.
Currently, it’s under rigorous investigation by federal and state agencies in the United States, among which is the Department of justice.
SBF, the platform’s former CEO, resigned from his position, and a new CEO, John J. Ray, was appointed to assess the situation. In a bankruptcy court session, he said the company failed due to a lack of corporate control.
Anatomy Yakovenko, CEO of Solana, has commented on the present situation of the platform and pointed out that the platform’s reserves are sufficient to carry them for 30 months with their current burn rate.
The reason that their reserve is so robust and able to run their operations for a year and a half is a lesson Yakovenko said they learned from the crypto crash in 2018.
The cryptocurrency crash in 2018 was epic and unique in the history of price crashes in the crypto industry.
Bitcoin, the largest crypto asset in the industry by market capitalization, lost over 80% of its value. By December 2018, Bitcoin had leveled off at $3,100.
Solana has currently lost 5.41% of its value in the last 24 hours and is now worth $12.84. However, loss of value was not the only woe Solana and its investors faced due to the crash.
On November 17, Binance, the largest crypto exchange by market cap, temporarily ceased deposits of stablecoins on Solana. Also, another major exchange delisted USDT, and USDC was housed on the network.
Before recent events, Solana was among the top challengers of the Ethereum network; it had the speed, scalability, and transparency; however, its future is suddenly clouded with uncertainty.
Nevertheless, Solana is doing all it can to stay afloat in this turbulent time, not giving up or succumbing to the pressure.
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