November 23, 2022
By Sharan Kaur Phillora
The havoc for the Solana network does not seem to calm down soon. The prominent open-source network had deep ties with the collapsed crypto exchange FTX. The native crypto asset SOL token has already suffered significant trading price losses. Another strike for Solana came from its NFT protocol maker Metaplex’s laying off its employees.
Here’s what we know:
Co-founder and chief executive officer of Metaplex, Stephen Hess, went on to Twitter to announce the reduction of working staff. Hess noted the company took a difficult decision to make several Metaplex Studios team members part ways.
In his seven Tweets long thread, Hess further added that given Metaplex being the Solana NFT ecosystem’s base layer, the platform is responsible for ensuring sustainability in the long term benefiting the community.
While clarifying the measure for workforce elimination, Metaplex CEO stated that the treasury did not get an impact following the FTX collapse, and “fundamentals remain strong,” though. Yet the indirect impact demands “a more conservative approach” before taking any step ahead.
Solana-based NFT protocol Metaplex was created intending to offer an alternative NFT network that remained largely under the dominance of the Ethereum network.
In January this year, the protocol raised about USD 46 million in funding from Jump Crypto, Multicoin Capital, and famous NBA player Michael Jordan. The funding was enough to give a significant push to the newly launched company, which landed in a while after maintaining a smooth initial journey.
After several months, Metaplex launched MPLX—NFT protocol’s native governance token. The move did not bring fruitful results, given the launch timing amidst the bear market, and the value tumbled. In amalgam with the growing debate around the royalties to creators, the NFT sales witnessed a steep decline in October.
The fall of FTX created a ripple effect and went on to intensify the beleaguered going situation for the crypto market. Major cryptocurrencies Bitcoin (BTC) and Ethereum (ETH) dropped following it but had a drastic impact on Solana (SOL). SOL token witnessed about a 60% drop in its value during a similar timeframe.
In addition, the organization behind the Solana network, Solana Foundation, had lost millions of dollars given its close ties with Sam Bankman-Fried.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.