Over $190 billion was lost from the cryptocurrency market capitalization due to the collapse of the FTX exchange, while the biggest losses were recorded by Solana (SOL) which was considered the crypto of the future.
The price of SOL took a 53.8% dive since the turmoil began on November 2, with its market capitalization being reduced from $11.6 billion to $5.1 billion.
In comparison, bitcoin’s market capitalization fell 18% to $319 billion and ether’s by 19% to $150.7 billion over the same period.
“In the current turmoil in crypto, the most unfortunate innocent victim is the Solana ecosystem,” said the CEO of Laguna Labs.
He and other market participants said that FTX and its sister company Alameda Research likely sold large amounts of cryptocurrency in an attempt to avoid bankruptcy, which eventually came.
Investors abandon Solana
Many investors and app developers want to abandon the Solana blockchain, which is widely used for decentralized finance (DeFi) applications, with the number of SOL coins deposited on it having fallen to 24.74 million compared to 68.2 million in June.
Solana co-founder Anatoly Yakovenko tweeted that the coin developer Solana Labs had no assets in FTX and has sufficient financial headroom for about 30 months. Another co-founder of the cryptocurrency, Rai Yocal, noted that this is a testing moment for the ecosystem, adding that “every time we get stronger.”
Some see a positive side
“It’s not the end of Solana, which has established itself as a thriving and competitive ecosystem on Ethereum. But if the question is whether its valuation is a bit of a bubble, the answer is yes,” said an executive at Struck Capital.
Some also see a positive side to SOL’s plunge. “It’s much better for Solana that the connection to the Bankman-Freed empire ends now, even if the result is a serious short-term setback,” said the co-founder of digital bank Ping.