Ethereum (ETH) co-founder Vitalik Buterin said he is confident Solana will be fine. He points to the network’s “earnest smart developer community” who now have the opportunity to build on it as the bear market has washed away the “horrible opportunistic money guys.”
Solana is a smart contracting platform that had massive exposure to Alameda Research, a trading firm affiliated with the now defunct cryptocurrency exchange FTX. Solana was described as the “Ethereum killer” during the last bull cycle of 2020 to 2021, given the popularity of the platform and its improved scalability.
However, Solana has failed to live up to the hype after seeing on-chain activity shrink sharply in 2022. Following the collapse of FTX and Alameda Research, Solana’s native token SOL has dropped to multi-month lows as critics anticipate further losses. In the coming days. Concurrently, developers and projects have migrated to competing networks, including Ethereum and Polygon.
Days after the unexpected event in early November halted FTX withdrawals, SOL prices crashed to record new lows, trading below $10, down more than 93 percent from 2021 peaks. After Vitalik posted his support for Solana, the coin recovered slightly to reach $9.50. trackers to show That prices have remained in range over the spot rate but are relatively higher, having bounced off December lows.
In sync with Vitalik’s confidence, some analysts are already calling for a bottom in SOL and crypto. In crypto Twitter, several users noted that SOL’s 2021-2022 chart closely mirrors that of Ethereum (ETH) between 2018 and 2019, when the coin fell 95 percent from a high of $1,300 in December 2018 to less than $100. .
The Sam Bankman-Fried Effect
Sam Bankman-Fried, who made significant investments in SOL and backed the Solana initiative through an FTX Ventures transaction, even went so far as to provide market-making services through Alameda Research, perhaps to recover the project. need to be separated from.
Their businesses collectively bought about 58 million SOL tokens, or 15% of the total amount now in circulation. While it is unknown how much SOL the now-bankrupt corporations still control, SOL holders should prepare for greater losses if those assets are liquidated as part of the settlement.
Currently, users are pulling liquidity from Solana DeFi, a move that is also affecting the liquidity of tokens launched on the high throughput blockchain.
Still, it remains to be seen whether SOL is the property of Mike Alfred. dismissed For bitcoin, its recovery depends on more than better public relations.
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