Solana Community faces new challenges as Founders of stablecoin exchange investigated and top NFT projects migrate to Ethereum in quick succession

January 16, 2023

By Joe Pan

The Solana community is not having a good year, as the U.S. Department of Justice is reportedly investigating Ian and Dylan Macalinao, the founders of Solana-based stablecoin exchange Saber Labs, following a CoinDesk exposé that revealed the brothers used a web of 11 pseudonymous identities to build an ecosystem of interlocking financial products that inflated growth metrics for the Solana network by billions of dollars during the height of crypto’s 2021 bull market.

The investigation is said to be focused on the web of crypto projects that orbited Saber, including decentralized-finance app Sunny Aggregator and stablecoin project Cashio, which lost millions in a March hack.

Adding to the bad news for Solana users and fans, the blockchain’s top NFT projects DeGods and y00ts announced that they will be taking their talents to Ethereum, Polygon.

According to OpenSea, DeGods and y00ts are among the most successful NFT collections on Solana. In the past 30 days, y00ts had the highest trading volume with 848,000 SOL, followed by DeGods at 673,000 SOL, despite y00ts having a lower floor price of 215 SOL compared to DeGods’ 790 SOL.

The decision to move to Ethereum and Polygon was met with mixed reactions, with some expressing support while others expressed disappointment. The team behind y00ts and DeGods were reportedly paid $3 million to make the move, according to a January 6 announcement from the company, shared on Discord and Twitter by Frank III, the founder of the two projects.

The Solana community continues to face challenges as the foundation overseeing the blockchain network has detailed its financial ties to the now-bankrupt FTX empire and founder Sam Bankman-Fried, which comes on the heels of the foundation’s previous defense of its relationship with FTX.

In a blog post, the Solana Foundation revealed that it had approximately $1 million worth of cash or equivalent assets on FTX as of November 6th, before the site stopped processing customer withdrawals. These assets are now stuck on the platform, pending the results of FTX’s bankruptcy proceedings.

The foundation also holds approximately 3.24 million shares of FTX Trading LTD common stock, along with about 3.43 million FTT tokens and 134.54 million SRM tokens from decentralized exchange Project Serum.

This disclosure of the extent of Solana’s financial ties to FTX and Bankman-Fried’s projects, despite the foundation’s previous defense, explains why the collapse of FTX has had such a significant impact on the price of SOL over the past week.

As of this writing, SOL is down 57% over the past week at a current price just below $14. The foundation also noted that around $40 million worth of “Sollet” assets (wrapped Solana versions of major cryptocurrencies) are impacted by exposure to FTX, as those assets had been backed by the exchange, and the status of the underlying assets is currently unknown.

About the author

Joe Pan is contributing editor for

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