Cryptocurrency Solana fell victim to FTX collapse losing more
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Cryptocurrency Solana fell victim to FTX collapse – losing more than half of its value

Once dubbed the “Ethereum killer,” the Solana blockchain promised to revolutionize the cryptocurrency industry by offering faster and less energy-intensive transactions. Instead, the project, founded two and a half years ago, became an unwitting victim of the drama unfolding between the two biggest players in the industry – crypto exchanges Binance and FTX.

    Image source: GuerrillaBuzz / unsplash.com

Image source: GuerrillaBuzz / unsplash.com

The SOL cryptocurrency on the Solana blockchain has lost more than half of its value this week, with only FTT, FTX’s own token, falling more sharply. This is because the Solana network is backed by Alameda Research, which is co-owned with FTX by Sam Bankman-Fried. And the whole nasty chain of events that led to the hasty decision to acquire FTX through its rival Binance was fueled by reports casting doubt on Alameda’s balance sheet.

Solana’s market cap has shrunk from $80 billion last November to $6 billion today. A string of failures that have plagued the project over the past year have also become a powerful negative factor. The cryptocurrency meltdown impacted the entire Solana ecosystem, including the decentralized finance platform Solend, which saw a surge in liquidations that resulted in a cumulative bad debt accumulation of $3.5 million.

And it looks like that’s not all. According to Solana Compass, network validators replacing the miners will withdraw 50 million SOL coins locked as collateral for transaction confirmation from the blockchain for a total of more than $940 million in the next 24 hours Bloomberg Expert, may indicate a loss of trust in the ecosystem.

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Robbie Elmers

Robbie Elmers is a staff writer for Tech News Space, covering software, applications and services.

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