The near collapse of FTX, the fourth-largest cryptocurrency exchange, may end Solana NFTs. For those that aren’t aware, there’s been a destructive situation between FTX and its competitor, Binance. It has unfortunately caused SOL to plummet over 40% in the last 24 hours and 50% in the last seven days! So, Sol is sitting at a price of $13.80, which is 94% below its all-time high of $351.96.
How will this affect Solana NFTs, and why? Let’s take a look.
Sol price plummet
The situation between the two exchanges is what caused SOL’s massive decline, but where did it all start? For starters, it all started when Binance CEO Changpeng Zhao tweeted that FTX was spreading rumours about Binance behind closed doors to the U.S. He then tweeted that he will be selling $2 billion in FTT tokens (FTX native token). It’s worth noting that, unlike Bitcoin, FTT is liquid, which resulted in the CEO being able to own such a large amount of tokens. In other words, once he sold, it caused a major sell-off that made FTT plummet by 63%. Sadly, this affected the whole crypto market. FTX’s Samuel-Bankman-Fried was viewed as someone who could assist crypto with regulatory approval.
Ties between Solana and FTX
SBF was a major investor in Solana and even called the cryptocurrency an “Ethereal killer.” In addition to the overall effect FTX’s insolvency had on the market, there are ties between the exchange and Solana that must be mentioned. According to Coindesk, Alameda Research, Bankman-Fried’s trading firm, had $1.1 billion worth of SOL on its balance sheet. That’s over 10% of the solana supply. Evidently, investors are worried that Solana will lose all the investments that FTX was making.
Solana getting killed. Market realizing that @cz_binance now owns 10% of the tokens and that he would rather support BNB chain than SOL. Also Solana just lost all the support and investment that FTX and @SBF_FTX were making in the ecosystem.
— Ran Neuner (@cryptomanran) November 8, 2022
What does this mean for Solana NFTs? Will the outages ever stop?
With all this pressure Solana is facing, it’s hard to tell who will stay in the ecosystem. Will everyone jump ship or will the true builders remain and act as if nothing happened? In short, we don’t know what will happen to Solana NFTs in the coming days. This could possibly be one of the worst crypto disasters we’ve ever seen so. Moreover, there are big players in the ecosystem, like Magic Eden, who are trying to keep members level-headed.
🧵1/ Don't get phased by the price action.
– 1000s of builders building cool shit
– @solana has the most active wallets on any chain
– @jump_firedancer is creating a path to 600k+ TPS
– @googlecloud becoming a solana validator
– Almost every event was jam packed at @SolanaConf pic.twitter.com/ENtZHlfYXj
— Magic Eden 🪄 (@MagicEden) November 9, 2022
Nonetheless, the community members are trying their best to stay afloat in the midst of this crazy price action. Many of them had some interesting things to say, including the @SolanaMBS NFT project.
how we supposed to bridge with solana tied to our name?
— SolanaMonkeyBusiness 🐒 (@SolanaMBS) November 8, 2022
Furthermore, an unfortunate fact is that the Solana chain is notoriously known for its network outages. Since January 2022, there have been 13 outages including one outage that lasted 16 hours and 24 minutes. Even during the FTX debacle, the chain experienced performance issues. Specifically, Defi Protocol Solend made it known that transaction failures were occurring because of network issues. What will happen next in this volatile market? We will have to wait and see.