November 14, 2022
By Murtuza Merchant
Solana NFTs may come to an end due to the imminent bankruptcy of FTX, the fourth-largest cryptocurrency exchange.
For those who are unaware, FTX and its rival Binance have been involved in a bitter dispute.
The ensuing commotion in the cryptocurrency market has led to a drop in Solana (SOL) by more than 40% during the past 24 hours and 50% over the past 7 days.
Its price right now is $15.20, which nearly 94% less than its all-time high of $351.96.
The situation at hand
SOL’s dramatic decline was brought on by the circumstances between the two cryptocurrency exchange, but how did it all begin?
To start with, it all began when Binance CEO Changpeng Zhao stated that FTX was circulating false information about Binance to the United States government behind closed doors.
Later, he tweeted that he would be offloading all the FTT tokens, the native tokens of cryptocurrency exchange FTX, which Binance held in its reserves.
Binance’s decision to sell FTT tokens in large numbers caused a domino effect and its prices plunged by over 90%.
The contagion had an impact on the entire crypto market.
Sam Bankman-Fried, the CEO of FTX was thought to be able to help cryptocurrency gain regulatory acceptance.
FTX and Solana connection
Bankman-Fried is a major investor in Ethereum, even dubbing it to be an “Ethereum killer” at one point in time.
In addition to the market’s impact of FTX’s bankruptcy, it is important to note any connections between the exchange and Solana.
Alameda Research, Bankman-trading Fried’s company, reportedly held SOL worth $1.1 billion on its balance sheet.
This is more than 10% of the available Solana.
Investors appear to be concerned that Solana will lose every investment that FTX had made in it.
In what ways does this affect Solana NFTs? When will the outages end?
It is difficult to predict who will remain in the ecosystem with all the strain Solana is experiencing and if everyone abandon ship, or will the real builders hold on and carry on as normal?
This might rank among the worst crypto disasters the market has ever witnessed.
Furthermore, influential entities like Magic Eden are working to keep participants in the ecosystem composed.
Notably, the Solana chain is infamous for network disruptions.
There have been 13 outages since January 2022, one of which lasted for 16 hours and 24 minutes.
The chain had performance concerns even during the FTX fiasco.
The Defi Protocol Solend made it clear that network problems were to blame for transaction failures.
Significant modifications must be done if the chain is to be taken seriously.
About the author
Murtuza Merchant is an avid follower of cryptocurrencies, blockchain and NFTs.