Delving into the wreckage of FTX and Alameda, it’s clear that some communities have been hit harder than others. Several DeFi protocols that have close ties to the two entities have suffered. Solana, for example, has been hit hardest since the crash.
SOL, once among the top 10 assets by market capitalization, has fallen to 17th place, and the struggle may continue in 2023 as well.
Solana Research and Development
Solana (SOL) had an impressive performance last year and was one of the best performing tokens in the bull market of 2021. However, since the dissolution of Sam Bankman-Fried’s crypto empire, it has lost more than 70% of its value.
The disgraced founder of FTX has repeatedly bashed Solana and its ecosystem for years. The bankruptcy exchange had $982 million in SOL, according to its balance sheet. In addition, SOL is Alameda Research’s second largest trading sister company.
Zooming out, Solana has lost more than 95% of its value since its all-time high last November. A crash of this magnitude shook even the most resilient of investors to the core.
The Solana ecosystem was expected to pose a serious challenge to Ethereum. Once declared an “Ethereum killer,” the development activity on the network also had a negative impact.
to me data From crypto analytics platform Santiment, Solana’s development activity has been on a massive decline. Developers no longer see any benefits in using the network and are currently in a near death state.
# Solana It’s now down 73% over the past eight weeks. the # Research and development Bullish on an asset that was once thriving, but there seems to be a very good case for the development activity to stall. Read our view on what the metrics indicate one dollar. https://t.co/P7AnKYfKYN
Saniment (@santimentfeed) December 28, 2022
Also Token Terminal’s data It indicates that the number of active blockchain developers has decreased from 3.7,000 registered at the beginning of the year to around 1.6,000 in December. The number of developers used to be somewhere around 2,553, but now the network only has 76 developers left.
Major Solana projects such as DeGods and y00ts also announced their departure from the network to Ethereum and Polygon, adding to the problems of layer one blockchains.
Total Value Locked (TVL) in SOL also tells a similar story, down 28% from 27.2 million to 18.93 million since November 6. This could mean that the decline in the value of TVL denominated in USD may not be a result of the price drop entirely, but rather a result of users withdrawing their DeFi assets.
Meanwhile, Solana’s stablecoin supply has been taking a real hit in recent weeks. The market capitalization of its stablecoin has fallen about 50% since November 6, from $3.9 billion to $1.8 billion.
But Solana’s co-founders, Anatoly Yakovenko and Raj Jokal, see the setbacks as temporary. The two executives recently told Fortune that the events will be crucial for the network moving forward.
– I think it’s a really good thing in the long run. We’ve always heard really negative criticism about FTX’s participation in the ecosystem and ownership concentration. So it feels like tearing off the bandage.”
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