Solana has revealed its exposure to the bankruptcy of cryptocurrency exchange FTX.
The smart contracts platform has seen the value of its native token SOL plummet 50% in the last week – it is worth $14.19 at the time of writing – compared to the 15% falls of other major coins.
The crisis was triggered by reports that a notable portion of FTX’s sister trading arm Alameda Research’s balance sheet was made up largely of its native FTX Token (FTT) and SOL. Changpeng Zhao, CEO of rival exchange Binance, subsequently revealed plans to liquidate any remaining FTT on its books – reported to be worth more than $500m – and FTX was unable to cope with the resulting surge in withdrawals.
FTX and Solana also work directly together. FTX’s Serum utility token SRM – an order book decentralised finance project – was built on its blockchain while several projects utilise FTX’s Sollet custodial bridge, a cryptocurrency wallet for interacting with the Solana blockchain.
Solana Foundation exposure
The Solana Foundation, an open-source project designed to facilitate the creation of DeFi apps, said in a blog post that it held 134.54 million SRM tokens and 3.43m FTT tokens on FTX. At current prices these assets are worth $29.3m and $4.4m, respectively. The day before withdrawals were halted, they were worth $107m and $83m.
The Foundation also holds 3.24m common stock shares in FTX. However, it says it held less than $1m of its balance sheet on FTX when withdrawals ceased, an impact it describes as “negligible” on its operations.
It added: “During the events of the past week, the Solana network has not experienced any notable performance or uptime issues.”
There were $40m worth of Sollet-based assets circulating on Solana the day before withdrawals were halted.
“Most of the largest DeFi projects on Solana had limited or no exposure to FTX, based on a recent assessment by Solana Foundation. There are certainly projects with exposure to FTX and those projects seem to be actively working to figure out a way forward, but the outcomes there are not yet known,” said the blog post.
“The DeFi environment in 2022 has been challenging but the ecosystem continues to evolve and innovate.”