Shalini Nagarajan


<p>Solana has been battered under the weight of its association with Sam Bankman-Fried, with the price of its native token now trading firmly at near-two year lows.</p>



<p>SOL has plunged 35% this month and 75% since the FTX saga first broke. It started November beyond $33 — SOL now trades at $9.14 after slipping to single digits early Thursday, reaching a low of $8.30 last night.</p>



<p>It was the first time SOL had seen single digits since February 2021. SOL changed hands for as much as $260 last November, representing a 96% collapse. For scale, bitcoin and ether have both dropped around 75% over the same period.&nbsp;</p>



<p>While Solana itself has no direct connection to bankrupt crypto exchange FTX, the network was loudly championed by its disgraced former boss Bankman-Fried.&nbsp;His trading unit Alameda Research <a href="https://www.crunchbase.com/organization/solana-io/investor_financials" target="_blank" rel="noreferrer noopener">invested</a> in Solana Labs&#8217; initial coin offering for SOL, per Crunchbase.</p>



<p>Alameda Research <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/?outputType=amp" target="_blank" rel="noreferrer noopener">reportedly</a> held about $1.2 billion in SOL tokens leading up to a crippling bank run on FTX, which led to its bankruptcy.</p>



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</div></figure>



<p>The situation has impacted The Solana Foundation, a non-profit dedicated to supporting the network’s growth. The group last month disclosed it had about $1 million in cash stuck on FTX.</p>



<p>No SOL was kept on the platform as it stopped withdrawals, the foundation has said, but it had lost:</p>



<ul>
<li>3.43 million FTT ($76.1 million before FTX blew up, $2.9 million now)</li>



<li>135 million serum ($180 million then, $18.9 million now)</li>



<li>3.24 million shares of FTX Trading LTD common stock (value unknown)</li>
</ul>



<p>FTT and serum are utility tokens for FTX and Solana-powered decentralized exchange protocol Serum, respectively. Both platforms were founded by Bankman-Fried.</p>



<p>There were also concerns that Serum had been compromised during the odd <a href="https://blockworks.co/news/ftx-bankrupt-hacked-investigated-a-timeline-of-events" target="_blank" rel="noreferrer noopener">cyberattacks</a> on FTX just before its bankruptcy. Critical private keys were custodied at FTX at the time, leading developers to fork the DEX protocol to ensure its legitimacy under control of a DAO.&nbsp;</p>



<p>Adding to Solana’s strife, two of its most popular Solana NFT projects, DeGods and y00ts, this week confirmed they’d be <a href="https://blockworks.co/news/top-solana-nft-projects-are-jumping-ship-to-ethereum-polygon" target="_blank" rel="noreferrer noopener">migrating to rival blockchains</a> Ethereum and Polygon early next year.</p>



<p>All these stresses have surely weighed heavily on the price of Solana. As crypto markets sag across the board, tokens associated with Bankman-Fried have been <a href="https://blockworks.co/news/ftx-backed-projects-plunge-as-sam-coins-underperform" target="_blank" rel="noreferrer noopener">hit particularly hard</a>.</p>



<p>But Solana Labs co-founder Anatoly Yakovenko told Blockworks in a <a href="https://blockworks.co/news/qa-solana-founders-raj-anatoly" target="_blank" rel="noreferrer noopener">recent interview</a> he believes effects of the past few months will eventually pass.</p>



<p>“This is a blip, it sucks, but in the end — four or five years later — barely anyone is going to remember it.”</p>



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<p><strong>Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.</strong></p>


Solana Price Sinks To Single Digits For First Time In Nearly 2 Years

Casey Wagner


<p>The collateral damage caused by Sam Bankman-Fried’s downfall continued Wednesday as tokens the disgraced FTX founder has backed slid further.&nbsp;</p>



<p>Here’s what’s going on with four major Bankman-Fried-backed projects and their related digital assets, including FTX’s own native token, FTT, as the former chief executive of the crypto exchange awaits trial — <a href="https://blockworks.co/news/sbf-released-on-bond" target="_blank" rel="noreferrer noopener">out on bail</a> and living with his parents in California.&nbsp;</p>



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<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" src="https://flo.uri.sh/visualisation/12291300/embed#?secret=IDYLEjqQzp" data-secret="IDYLEjqQzp" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Blockworks Graphic by David Canellis</figcaption></figure>



<h3 class="wp-block-heading">SOL&nbsp;</h3>



<p>Bankman-Fried was a main backer of the smart contracts-focused protocol Solana, whose native token, SOL, is down almost 95% against the dollar year-to-date. FTX had purchased more than 58 million SOL tokens from the Solana Foundation and Solana Labs starting in August 2020, according to the now-bankrupt exchange.&nbsp;</p>



<p>SOL lost as much as 12% on Wednesday as traders fretted over large holders selling positions. The token is down almost 65% over the past three months versus bitcoin.&nbsp;</p>



<h3 class="wp-block-heading">SRM</h3>



<p>SRM, the protocol Serum’s native token, was a large position on Alameda Research’s <a href="https://www.coindesk.com/business/2022/11/02/divisions-in-sam-bankman-frieds-crypto-empire-blur-on-his-trading-titan-alamedas-balance-sheet/" target="_blank" rel="noreferrer noopener">balance shee</a>t, valued at $2.2 billion before the proprietary trading firm’s collapse. The company minted a cumulative 100 million SRM between February and May 2022, increasing the token’s total supply by some 60%.&nbsp;</p>



<p>SRM is down more than 96% against the dollar this year — and dropped nearly 5% by early Wednesday afternoon in New York alone before clawing back losses. Compared to bitcoin, the token was down more than 15% over the past week and 33% over the past 3 months.&nbsp;</p>



<h3 class="wp-block-heading">REN<strong>&nbsp;</strong></h3>



<p>Formerly known as Republic Protocol, Ren said in February 2021 that it was “joining” Alameda in a vague <a href="https://medium.com/renproject/ren-alameda-90a8f471b323" target="_blank" rel="noreferrer noopener">blog post</a> written by founder Taiyang Zhang.</p>



<p>“In addition to this renewed focus, the Ren team will also be working with Alameda to continue development on its top-priority: reaching the next phase of [decentralization],” Zhang said at the time.&nbsp;</p>



<p>The platform, which issues wrapped bitcoin, known as renBTC, said earlier this month it was attempting a redesign, <a href="https://medium.com/renproject/introducing-ren-2-0-43025b3d5d6" target="_blank" rel="noreferrer noopener">Ren 2.0</a> in the wake of the FTX crash. Minting has been disabled and burning was closed out Dec. 20 ahead of the launch — which focuses on increasing decentralization and security, the company said.&nbsp;</p>



<p>The token was down more than 40% relative to the dollar over the last three months— and more than 33% in relation to bitcoin. REN has booked a slight rebound this week, though, with the coin rallying about 5.5% over the past seven days.</p>



<h3 class="wp-block-heading">FTT<strong>&nbsp;</strong></h3>



<p>FTX’s native FTT token held a prominent position on Alameda’s balance sheet, which contributed to November’s mass sell-off as investors parsed emerging details of the relationship between Bankman-Fried’s prop trading firm and his exchange.&nbsp;</p>



<p>The token is now down about 95% over the past three months. Last week, it dipped below $1 for the first time — and has remained there since. FTT was sitting around $0.89 Wednesday afternoon.&nbsp;<br>FTX, now proceeding with its Chapter 11 bankruptcy filing, is now also up against SEC scrutiny: The regulator <a href="https://blockworks.co/news/sec-ftt-complaint-is-yet-another-case-of-regulation-by-enforcement" target="_blank" rel="noreferrer noopener">deemed FTT a security</a> in a December filing.</p>


FTX-backed Projects Plunge as ‘Sam Coins’ Underperform

Jacquelyn Melinek

<div id="highlights-block_61d8726038f89" class="highlights">
        <ul>
                <li>“We’ve raised about $70 million to $80 million, and it’s still ongoing,” pseudonymous contributor JHL said</li>
                <li>Long term, JHL said the Serum community would love to see the protocol become the central liquidity hub for all financial assets</li>
            </ul>
    
</div>



<p>The Incentive Ecosystem Foundation (IEF), a community-led organization focused on supporting the Serum network, has raised over $70 million and is in the process of closing the round at $100 million, a Serum contributor who goes under the alias JHL told Blockworks.&nbsp;</p>



<p>“We’ve raised about $70 million to $80 million, and it’s still ongoing,” JHL said. “We’re wrapping up conversations with VC firms and the total amount to be raised will be $100 million,” he said.&nbsp;</p>



<p>Serum is a decentralized exchange (DEX) platform and liquidity provider for DeFi protocols on Solana’s blockchain. It is the eighth-largest decentralized exchange and has a 24-hour trading volume of about $273,383,720, according to <a href="https://www.coingecko.com/en/exchanges/serum_dex" target="_blank" rel="noreferrer noopener">data</a> on CoinGecko.</p>



<p>There are over 70 <a href="https://project-serum.webflow.io/built-on-serum" target="_blank" rel="noreferrer noopener">projects</a> participating in its ecosystem, from AMM and yield farming project Raydium to economy driven multiplayer online role-playing games like OpenEra.</p>



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1024" height="800" src="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg" alt="Serum integration node list" class="wp-image-13660" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=329 329w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=334 334w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=280 280w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=80 80w, https://blockworks-co.imgix.net/wp-content/uploads/2022/01/integration-and-nodes-en-1024x800-1.jpg?w=1920 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption>The Serum integration node list; Source: Serum</figcaption></figure>



<p>The funding will go toward supporting several areas of growth on Serum’s network such as DeFi, NFTs, gaming, metaverse and DAO tooling.&nbsp;</p>



<p>There are about 18 investors funding the capital raise, currently, including Commonwealth Asset Management, <a href="https://cms.blockworks.co/billionaire-alan-howard-tiger-global-invest-in-20m-funding-round-for-livepeer/" target="_blank" rel="noreferrer noopener">Tiger Global</a>, Tagus, and executives from GoldenTree Asset Management.</p>



<blockquote class="wp-block-quote"><p><strong>“I think there’s a lot of interest from these firms because of Serum’s architecture,” JHL said. “It’s similar to the experience of trading on platforms like Binance or FTX,” he noted.</strong>&nbsp;</p></blockquote>



<p>Around 85% of the allocation that investors receive will go into current and future tokens in the ecosystem including Serum, Solana and other ecosystem tokens like Raydium, JHL said. About 30% will be allocated to Serum, with 15% to Solana tokens.&nbsp;</p>



<p>IEF previously closed a funding round 18 months ago, when the organization was created, but the amount raised was not public, JHL said. “At the time, we raised primarily from crypto-native venture capital firms and now the emphasis is more on firms that can help us expand into the TradFi space,” he noted.&nbsp;</p>



<p>Long term, JHL said the Serum community would love to see the protocol become the central liquidity hub for all financial assets to be traded, from token equities to synthetic assets as well as fiat currencies.&nbsp;</p>



<p>“Really what we’re trying to do is bring all this on-chain and have Serum become this global hub for liquidity for trading these kinds of assets,” JHL said.</p>



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