The Solana cryptocurrency is losing another week in a row and is already nearly 94% below its price peak in the fall of 2021, when Bank of America reported that the blockchain would become the 'Visa among cryptocurrencies'. In addition, the pressure is created by speculation about a possible desire to sell off by the largest holders of SOL tokens:
Solana was backed by FTX and Sam Bankman-Fried, since the collapse of FTX Solana has lost almost 60% of its valuation. According to estimates, bankrupt Alameda Research held roughly $1.2 billion in Solana - the tokens were its second largest position. This caused a massive sell-off of the cryptocurrency reserve amid fears of a poorly liquid FTX balance sheet and a possible supply of Alameda Research;
Solana's decentralized Raydium protocol was hacked that week to the tune of about $2 million through the use of private keys by hackers who took funds out of the so-called liquidity pool. According to Decrypt, it is still unclear how the hackers came into their possession;
A number of projects affiliated with the NFT industry, among others, are considering migrating from Solana's blockchain (including NFT exchange MagicEden, cryptocurrency wallet Phantom and NFT-related projects DeGods and Y00ts. The DeGods project and Y00ts will power the blockchain of rival cryptocurrency Polygon starting in early 2023. Polygon's Ethereum-operated blockchain has been selected as the target NFT blockchain by Meta Platforms, Disney, Adidas, Nike and Reddit, among others;
In November, NFT sales of DeGods and Y00ts accounted for nearly 70% of all NFT sales on Solana, according to data from the Magic Eden exchange. Their exodus could be a significant blow to the adoption and popularization of SOL-associated projects;
Nevertheless, on the pages of a recent interview with Blockworks, cryptocurrency creators Raj Gokal and Anatoly Yakowenk reported that they are optimistic about the future and compared Solana's temporary problems to similar such events that affected Bitcoin (Mt.Gox in 2014) and Ethereum (the 2016 DAO hack). Both of these events temporarily halted the growth of both cryptocurrencies.
Denominated in U.S. dollars, the value of TVL (Total Value Locked) i.e. investors' funds deposited on Solana's blockchain currently stands at around $209 million versus $10 billion in November 2021. The value denominated in SOL tokens has also declined and approached July 2021 levels. Source: DefiLIama
Solana chart, D1 interval. Solana has lost significantly more than Bitcoin and Ethereum. The price of the cryptocurrency retreated to the levels of February 2021, the SOL TVL deposited on the blockchain at that time, which may be one measure of the blockchain's expansion, was then nearly twice as low as it is now. Source: xStation5
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