Solana battles intense scrutiny after Samuel Bankman-Fried FTX empire collapse, will SOL survive in 2023?
- Solana network was championed by Samuel Bankman-Fried, the co-founder of FTX exchange and Alameda trading.
- Solana is battling scrutiny from critics who argue that SOL price appreciation was driven by Bankman-Fried’s marketing efforts.
- SOL price is down 94.8% over the past year, the altcoin is struggling to recover from the bloodbath in the aftermath of FTX's collapse.
Solana lost nearly 95% of its value over the past year, in the aftermath of the FTX collapse and bankruptcy. The Ethereum-alternative is struggling to hold steady after Samuel Bankman-Fried’s FTX exchange suffered insolvency. Experts believe the Solana price rally relied on the marketing efforts of Samuel Bankman-Fried (SBF).
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Solana struggles to survive crypto winter in aftermath of FTX exchange collapse
Solana, Ethereum’s competitor, is struggling to survive the crypto bear market since FTX exchange’s collapse. Since November 2022, SOL price has plummeted 30%. The crypto community is debating whether Solana can survive 2023 and recent events have raised questions about SOL’s future prospects.
The Ethereum-killer network witnessed a steep decline in its price over the past month. Fear, uncertainty and doubt (FUD) in the crypto community has accelerated and the recent departure of NFT projects and active developers from the Solana network triggered a bearish sentiment among SOL holders.
Competition from other Ethereum scaling solutions and the collapse of Solana’s vocal supporter Samuel Bankman-Fried’s firms FTX exchange and Alameda Research has seen FUD spike in the SOL holder community.
Skeptics in the crypto community argue that Bankman-Fried’s market interventions and advocacy triggered a rally in Solana price and drove the token’s appreciation. While SBF is under house arrest and facing charges, and FTX exchange is going through financial restructuring post its bankruptcy filing, SOL price dropped 96.4% from its all-time high of $259.96.
Solana co-founder scrambles to save the altcoin from collapse
Anatoly Yakovenko, co-founder of Solana Labs Inc. is scrambling to sever the connection of the token with SBF. In an interview earlier this month, Yakovenko said that he doesn’t usually comment on price and his focus is on “the technology and having people build something awesome that’s decentralized.”
The collapse of FTX exchange had an impact on the Solana ecosystem and its founders. The price drop in the Ethereum-alternative was seen as an expression of waning confidence in the FTX ecosystem and the spreading contagion.
Yakovenko said that roughly 4% of the teams building projects on the Solana network were acutely affected by FTX’s collapse. Some projects had funds custodied on the crypto exchange. About 80% of teams on Solana’s blockchain had no exposure at all to FTX, and the team is working on connecting severely impacted founders with investors who could potentially provide emergency capital.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
