Solana has revealed its exposure to the bankruptcy of cryptocurrency exchange FTX.
The smart contracts platform has seen the value of its native token SOL plummet 50% in the last week – it is worth $14.19 at the time of writing – compared to the 15% falls of other major coins.
The crisis was triggered by reports that a notable portion of FTX’s sister trading arm Alameda Research’s balance sheet was made up largely of its native FTX Token (FTT) and SOL. Changpeng Zhao, CEO of rival exchange Binance, subsequently revealed plans to liquidate any remaining FTT on its books – reported to be worth more than $500m – and FTX was unable to cope with the resulting surge in withdrawals.
FTX and Solana also work directly together. FTX’s Serum utility token SRM – an order book decentralised finance project – was built on its blockchain while several projects utilise FTX’s Sollet custodial bridge, a cryptocurrency wallet for interacting with the Solana blockchain.
Solana Foundation exposure
The Solana Foundation, an open-source project designed to facilitate the creation of DeFi apps, said in a blog post that it held 134.54 million SRM tokens and 3.43m FTT tokens on FTX. At current prices these assets are worth $29.3m and $4.4m, respectively. The day before withdrawals were halted, they were worth $107m and $83m.
The Foundation also holds 3.24m common stock shares in FTX. However, it says it held less than $1m of its balance sheet on FTX when withdrawals ceased, an impact it describes as “negligible” on its operations.
It added: “During the events of the past week, the Solana network has not experienced any notable performance or uptime issues.”
There were $40m worth of Sollet-based assets circulating on Solana the day before withdrawals were halted.
“Most of the largest DeFi projects on Solana had limited or no exposure to FTX, based on a recent assessment by Solana Foundation. There are certainly projects with exposure to FTX and those projects seem to be actively working to figure out a way forward, but the outcomes there are not yet known,” said the blog post.
“The DeFi environment in 2022 has been challenging but the ecosystem continues to evolve and innovate.”
Cryptocurrency shorts
Zhao, asked on Twitter whether Binance had profited from the FTX collapse and should reimburse people who had lost money, said: “As a user, you also have responsibility — you can’t just blame all of the responsibility to other people. When bad things happen, if you blame all of the responsibility, if it’s always to other people, you will never be successful. You are also always looking at the most responsible person to yourself, which is yourself.”
Payments giant Visa has ended its partnership with FTX – announced just a month ago – which was intended to roll out a debit card programme in 40 countries worldwide.
Web3 brand engagement platform Kalder has raised $3m in a pre-seed round. Founded by Gökçe Güven, an early product designer at NFT marketplace OpenSea, it aims to provide brands with digital tools to execute sustained and dynamic marketing campaigns. Indigo Fund (DJ Blondish), 8VC, 500 VC, Human Capital and Soma Capital invested.
ClimateTech Web3 startup Thallo has raised a $2.5m seed round to develop a carbon exchange. Investors include Ripple, Arcan LLC, Friendly Trading Group 2, Allegory, Cerulean Ventures and Flori Ventures. Thallo has also received a grant from Layer 1 blockchain Celo.
Nike has launched an NFT marketplace named .Swoosh which will host its first digital collection next year. Some of the digital collectibles will unlock benefits such as access to real-life products and events.
Sandals worn by Apple founder Steve Jobs – and featuring the sweat-stained imprints of his feet – have fetched $218,750 at auction. An NFT version of the footwear is included.
Crypto prices
The overall market cap of the 21,700 coins is at $841 billion at the time of writing (7am UK), a 2.5% increase in the last 24 hours.
For round-ups of recent cryptocurrency news developments, click here.
For valuations of the top 100 coins by market cap in US dollars, plus 24-hour price change, see below.