But it died with the fall of FTX.
FTX and Sam Bankman-Fried aka SBF turned the Solana cryptocurrency into the “Ethereum killer”.
FTX’s fraud caused many cryptocurrencies to fall to the bottom. One of the hardest hit was the Solana (SOL) cryptocurrency. On top of that, there are already concerns about the stability of the network. Some say it has too many flaws.
This year there was one day when the Solana network crashed for seven hours. It was the seventh crash in just a few months. For comparison: Bitcoin and Ethereum have never crashed in their entire history. The supposedly fastest blockchain in the world had a security problem.
It was also discovered mid-year that large parts of the Solana ecosystem were artificially inflated in the past.
With this, doubts are growing about the future of the Solana project. Some have already canceled the blockchain.
So, will Solana die a painful death or will Ethereum’s supposed killer rise stronger from the ashes?
Solana’s fall is scary
SOL was the most beloved cryptocurrency by Sam Bankman-Fried and his crypto exchange FTX. No wonder many Solana native tokens are called “Sam coins”. And the SOL price has taken a bath with the SBF lie.
In just a few days, the SOL price dropped from around 35 US dollars to around 11 US dollars. A 68 percent drop, which means that the SOL is now also 95 percent short of its all-time high.
This may not only have destroyed the confidence of many investors but also put a huge strain on the DeFi ecosystem as a whole.
After all, many financial strategies and protocols rely on the SOL token. As a result of the price drop, many DeFi (decentralized finance) traders and lending positions will have been liquidated, which should have triggered a real Solana capital imbalance.
Nobody cares about Solana anymore
The stablecoins also left the Solana network without a second thought. And it seems that the DeFi Solanas sector is running out of liquidity.
Other exits threaten to hurt many Solana decentralized financial apps. Serum DEX was once the reservoir of all liquidity in Solana.
The Serum protocol has already been forked.
Many other DeFi protocols in Solana have also been forced to stop trading and depositing activities due to their own linkage to exchange liquidity.
As a result, the DeFi ecosystem is experiencing major mismatches.
However, Solana still ranks in the top ten among all blockchains in terms of developer activity. Even after the crash.
If the Solana network is no longer worth working with, there are many other blockchains available to developers.
Near Protocol (NEAR) or Aptos “Solana Killer” (APT) would be options for programmers. Since these two networks use the same programming languages.
Overall, Solana’s blockchain infrastructure may soon become obsolete if it is considered an emerging innovation.
Solana is not dead yet
The selling pressure is still there.
It is still too early to say whether Solana is really dead. However, the project and the ecosystem have undoubtedly suffered and are far from over the roller coaster.
Alameda Research and FTX also continue to hold large amounts of SOL tokens. And they will probably have to sell them during the insolvency process.
Meanwhile, the general market situation continues to weigh on the sentiment of many investors. For all the right reasons, Solana could become an attractive project again.