Solana hammered after FTX Collapse

DecryptNovember 16, 2022

Solana, the former 8th largest crypto asset, has been in a freefall since FTX went insolvent. SOL, the native token from Solana, dropped over 55% in a week, making it the worst performer in the top-100 after FTT.
While Solana had no direct ties with the FTX platform, many of the early investors were one way or another FTX ventures. Often, the network was called the VC network, with huge allocations towards several VCS. Alameda Research/FTX possesses at least about 15% of the network posing huge supply overhang from future liquidations.
At their peak last November, decentralized finance (DeFi) applications stored more than $10 billion on the Solana network, its popularity being led by high-flying proponents including Sam Bankman-Fried, the founder of the FTX crypto exchange, Multicoin Capital, Sino Global Capital and other venture funds.
The total value locked (TVL) has decreased to slightly over $300 million a year later as a result of FTX filing for Chapter 11 bankruptcy and being investigated, Multicoin and Sino Global claiming significant losses, and the Solana Foundation itself suffering "tens of millions" of dollars in damages.
Given that Bankman-Fried had been a key supporter of the network, his demise resulted in a general decline in opinion of Solana. On one notorious occasion, he tweeted to a cryptocurrency dealer, "I'll purchase as much SOL as you have, right now, at $3... After that, f**k off.
Further, much of the ecosystem has been hit as well. NFT trading has plummeted and more projects are actively exploring moving towards a better and more stable ecosystem of other blockchains. It seems that both investors and users are moving away from Solana for the time being. Fourstack has not participated in the Solana Network whatsoever since its launch, as it does not pass the ‘liveness’ criteria of Fourstack’s Risk Framework.