The crypto market is struggling — and that’s certainly true of projects related to now-bankrupt crypto exchange FTX and disgraced former CEO Sam Bankman-Fried. Among them is Solana, the blockchain that has been up for some time looking poised to pose a serious challenge to Etheruem.
Bankman-fried Inflated Solana and its ecosystem regularly for many years, both personally and through FTX. The exchange went bankrupt holds $982 million in SOL, according to its balance sheet.
Bankman-Fried even created a “decentralized” exchange called Serum on Solana.
Even though Serum was recently split off from Bankman-Fried’s influence and name, and projects in the Solana ecosystem continued to build during the downturn, the token’s price its affected. In the past 30 days, Solana’s SOL was 61% offcurrently trading at around $14—94% below the November 2021 all-time high.
Also, the developer commits are about 50% off in the last month, and active developers fell by a similar amount, said Tom Dunleavy, senior research analyst at Messari. Luck. “This is the highest drop among the main Grade 1s,” he said. (Follow to gokustatsmonitor developer activity, committing to being “the smallest unit of work for a developer…this is usually a good proxy for developer productivity.”)
But Solana co-founders Anatoly Yakovenko and Raj Gokal are not focused on SOL pricing and see recent setbacks as temporary. They see the turmoil as a necessary part of the clearing process, which is crucial to moving forward.
“I think in the long run, that’s really good,” says Gokal Luck. “We always hear really negative criticism about FTX’s involvement in the ecosystem and ownership concentration. So it feels like ripping off the head scarf.
‘He does not answer’
Gokal and Yakovenko discovered the details of the FTX scandal — which involved Bankman-Fried robbing customers of money to prop up his hedge fund — at the same time as others, they said. Gokal said he recently tried to contact Bankman-Fried but to no avail.
“I think I asked him if he had an update on how Solana would be affected by all of this and he didn’t answer, or I think his answer is ‘I’m not sure,'” Gokal said.
On the other hand, Gokal and Yakovenko say they have not received any news from Bankman-Fried.
After the collapse of FTX, “I was really shocked. “It’s really strange to have to reconcile what’s going on,” Yakovenko said.
Yakovenko recalls, FTX worked closely with the Solana team after Bankman-Fried decided to create a Serum on Solana. But as FTX grew larger as a centralized exchange, Bankman-Fried and team “started to focus more on their brand and expansion globally, in the US and things in DC,” and “There has certainly been a shift in focus,” Yakovenko explains. “This separation happens naturally as their interest shifts somewhere else.”
Gokal recalls the gap that formed when NFT on Solana started rolling out last year.
“There are very different approaches that FTX will take. They want to partner with celebrities and do supervised NFT exchanges,” said Gokal. “Our approach is online, solving problems for creators like dividing royalties and allowing anyone to launch their own online auction.”
Looking ahead, Gokal and Yakovenko are not worried about the FTX bankruptcy proceedings and the possible liquidation of SOL.
“The number of shares that FTX holds in these proceedings does not affect the security of the network,” Yakovenko said. “In general, their stake size is not important enough to be an issue.”
Gokal added that any rumors online that Solana is “dead” are just “crap” or sow fear, uncertainty and doubt.
“These are possible roadblocks for any ecosystem at this stage, especially with this phase of the market cycle,” said Gokal. “But I thinhk [the road bumps are] consolidation, and they are far beyond what any centralization of ownership can provide.”
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