Solana NFTs Crush Amind the Fallout of FTX
Solana non-fungible tokens (NFTs) have hit record low levels amid the fallout of cryptocurrency exchange FTX.
FTX and Alameda, which appear to be on the cusp of collapse, are dragging the entire Solana ecosystem down along with them, with data suggesting that NFT users of the blockchain have dropped to the lowest levels.
The underperformance of Solana NFT collections is because of FTX’s advocacy of the Solana layer-one blockchain. As the exchange’s implosion was taking place, the price of the Solana token tanked 68% to $12.
Along with the slide in nonfungible tokens, which represent collections of things like artworks that can differ from one another, FTX’s fungible exchange token known as FTT and FTX’s Solana-based decentralized exchange (DEX) Serum are down 89% and 53%, respectively, in recent days.
The saga of FTX’s insolvency is unfolding, but the picture is starting to become clearer. It appears the exchange lent out customer deposits to its sister company Alameda Research, which was a hedge fund that made poor discretionary bets with the assets.
Solana-based marketplaces Magic Eden, OpenSea and Solanart have seen significant increases in NFT trading volume, more than tripling to over 250,000 solana traded daily from about 80,000 just a week ago. As NFT prices slid, this increase in volume suggests holders were rushing for the exits and offloading their NFTs due to the FTX incident.
Alameda’s collapse triggered FTX’s insolvency, creating a balance sheet hole to the tune of $10 billion and leading FTX to file for bankruptcy-court protection on Friday, Nov. 11.
The FTX turmoil has not just tanked the price of the native FTX Token
FTT $1.86 but any token associated with Sam Bankman-Fried or his companies. Solana’s SOL tickers down $15 a top-10 cryptocurrency and one of Bankman-Fried’s biggest investments, lost 32% of its market cap over the past couple of days.
Chainlink Labs said it would offer proof-of-reserve services for embattled exchanges. The new concept came to light after the collapse of the FTX exchange as a measure that can restore trust in crypto exchanges through greater transparency.
The DeFi ecosystem also faced criticism for denying user access based on wallet content. Entrepreneur Brad Mills criticized the so-called decentralized ecosystem and said DeFi rebuilt everything wrong with Wall Street on a blockchain.
It was a bloodbath on Crypto Street this past week, with the majority of the top 100 DeFi tokens trading in the red in the wake of FTX turmoil.
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