FTX’s sudden collapse has sent great shockwaves throughout the crypto industry. Many cryptocurrencies fell prey and lost a considerable chunk of their value. Solana has also become the victim of the FTX fiasco. As the situation of FTX started to deteriorate last week, Solana lost tens of millions of dollars’ worth of cryptocurrencies as a result of them being stranded on the FTX network. This also includes approximately 3.24 million common stock shares in the exchange.
However, many trading projects on Solana make use of assets called Sollet assets. These assets serve their purpose of being a stand-in for BTC. Just before transactions were halted, there was a total of $40 million worth of Sollet-based assets circulating on Solana.
The Connection of Solana with FTX
It is worth mentioning that some of the biggest DeFi projects on Solana had little to no exposure to FTX. There certainly are some projects that have exposure to FTX, but the outcomes of this are still uncertain. FTX’s collapse continues to send shivers down Solana’s spine. As a direct result, Solana has experienced a decline of up to 50% over the course of the previous week. At the time of writing, SOL is trading at $14.57. It is roughly 54.88% down in the previous 7 days.
Moreover, it is believed that Solana’s crisis was triggered due to reports about Alameda Research, FTX’s sister company. It was said that the balance sheet of Alameda Research was built up mostly with FTT and SOL tokens. Previously, Changpeng Zhao expressed his intentions of liquidating any remaining FTT on Binance’s books. As a result, it became impossible for FTX to cope with the increase in rapid withdrawals.
Furthermore, Solana and FTX previously joined hands in an effort to work together as well. FTX’s Serum Utility Token was built on its blockchain technology. Moreover, several projects even use FTX’s Sollet custodial bridge. It can simply be defined as a crypto wallet for interacting with the Solana blockchain. FTX’s CEO was said to be a key supporter of the Solana Network. Sam Bankman-Fried previously purchased 58,086,686 SOL tokens. It is still unclear what will happen to these tokens right after FTX is done with its bankruptcy proceedings.