FTX was Solana’s Biggest Backer. What now?
Solana's entire ecosystem was built, propped up, and in part reliant on FTX and Alameda Research. What now?
FTX’s collapse isn’t news to anyone at this point, but the fallout isn’t happening evenly across crypto. Solana is the ecosystem taking the biggest hit, mostly because FTX was their biggest supporter. It’s estimated that 10% of SOL is held by FTX, Alameda, or other related corporations–that’s 28.5M SOL.
Solana’s price already got smashed, taking a 62% nose dive last week. When the FTX news was breaking, Solana’s validators at one point had >60% of all tokens queued to be unstaked. FTX had initially queued for unstaking itself, but that was later reversed. It’s unclear how many individuals and projects have SOL trapped in the FTX blackhole, but some familiar with bankruptcy fear it could be many years until those tokens become available again. I guess Solana just got a lot more hodlers.
Beyond just the SOL token though, the greater Solana ecosystem is at risk. SBF’s empire held control over Serum, a widely used Solana protocol that allows for easy creation of decentralized exchanges (DEXs) by being a plug and play transaction handler. Serum has handled $32B in transactions this year. Developers announced today that they’ve forked the Serum project and keys are now secure with its trusted developers, out of reach of SBF & co.
Sollet Bitcoin, Wrapped Bitcoin on Solana (soBTC)
Solana’s wrapped version of Bitcoin, Sollet Bitcoin (soBTC) was known to have very close ties to FTX. Everyone believed that either Alameda or FTX created soBTC and held the Bitcoin that backed soBTC one-to-one, and in fact, FTX was the only place you could make the swap from soBTC to real BTC. When FTX filed for bankruptcy, the “wrapped” token got crushed, and is currently trading for about 10% of the spot BTC price. This would imply that investors think there is a 10% chance BTC recovers, but honestly, I think it’s closer to 0%. There are about 16,000 soBTC bouncing around out there, but it’s believed ~90% of that is held by FTX and Alameda wallets. That’s still a whopping $25M in unaccounted for BTC that investors are holding the bag for.