As a result of its relationship with Sam Bankman-Fried, the price of Solana’s native token has fallen to levels not seen in almost two years.
The price of SOL has dropped 35% this month and 75% since the FTX scandal surfaced. It began November at over $33; SOL currently trades at $9.14 after falling to single digits early Thursday and hitting an all-time low of $8.80 yesterday night.
It was the first time since February 2021 when SOL was below ten. In November of last year, the highest price paid for SOL was $260, signifying a 96% decline. Bitcoin and ether have both fallen around 75% in value during the same time span.
While Solana has no direct ties to the defunct cryptocurrency exchange FTX, its discredited former CEO Bankman-Fried vocally supported the network. According to Crunchbase, his trading unit, Alameda Research invested in Solana Labs’ initial coin offering for SOL.
According to reports, Alameda Research possessed around $1.2 billion in SOL tokens prior to a severe bank run on FTX, which led to its collapse.
The problem has affected The Solana Foundation, a non-profit committed to fostering the expansion of the network. The organization announced last month that it had around $1 million trapped on FTX.
FTT and serum are utility tokens for the decentralized exchange protocols FTX and Serum, respectively, powered by Solana. Bankman-Fried is the creator of both platforms.
In addition, there were suspicions that Serum had been hacked during FTX’s sporadic hacks before its bankruptcy. At the time, crucial secret keys were held by FTX, prompting engineers to fork the DEX protocol to secure its authenticity under DAO ownership.
DeGods and y00ts, two of the most popular Solana NFT projects, announced this week that they would migrate to competitor blockchains Ethereum and Polygon in early 2019.
All of these pressures have undoubtedly had a significant impact on the price of Solana. As crypto prices decline across the board, Bankman-Fried coins have been struck especially hard.
In contrast, Solana Labs co-founder Anatoly Yakovenko said in a recent interview with Blockworks that he expects the impacts of the last few months will ultimately subside. “This is a blip, and it stinks, but four or five years from now, almost no one will remember it.”