Solana has been a significant competition for Ethereum in the past few years and gained massive traction. But ever since the collapse of FTX, there has been speculation concerning the future of Solana.
The layer-1 blockchain experienced rapid growth, and the price of its native token surged wildly during the bull market run from 2020 to 2021. But lately, doubts are beginning to rise about what will happen to Solana next.
Moreover, Ethereum’s layer-two technology threatens Solana’s value proposition of delivering faster and lower fees transactions. Furthermore, the biggest challenge Solana may be facing now is with SBF (Sam Bankman-Fried), who was Solana’s biggest backer but is currently under investigation over allegations of fraud.
Many even argue that Solana’s price increase from 2020 to 2021 was thanks to SBF’s advocacy and market intervention. Solana’s value has decreased drastically from $258.78 in November 2021 to less than $10, according to current on-chain data — a 96% drop in value.
A Huge Decline
Also read:Compared to BTC, which experienced a 74.5% drop, and ETH, which saw a 74.6% drop, SOL has been more deeply affected than the leading digital assets. Even worse, DOGE — the famous meme coin dropped 76%, a dip smaller than the 96% drop of SOL.
What’s more, Solana has dropped to the 19th most valuable cryptocurrency from the 5th position, as reported by CoinGecko. Furthermore, there has been a decline in the trading volume of DeFi platforms based on Solana —- a drop from $10.2 billion to lower than $210 million from November 2021 to date.
That’s a drastic decline of 98%. SOL is the current 12th largest chain ranked by TVL (total value locked). Not only does it follow Polygon, but it also trails behind DefiChain and Cronos.
The most significant drop in Solana’s metric all around happened during the crash of FTX and the exposed fraud of SBF. There are speculations that Bankman-Fried’s support for SOL was financed through his theft at FTX.
Additionally, Caroline Ellison — CEO of Alameda, amongst other executives- reported to the SEC (Securities and Exchange Commission) that SBF promoted FTT (FTX token) market manipulation.
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