Solana Founders Scramble To Move Past FTX's Stain on Their Token

Solana, the blockchain network once championed by Sam Bankman-Fried, is drawing intense scrutiny as industry watchers wonder whether its former close ties to the disgraced crypto mogul and his now-defunct FTX empire will jeopardize its future. From a report: Its founders are doing everything they can to break that connection. The price of Solana's crypto token, SOL, has plummeted 96% from its all-time high of $260 in November 2021 to about $10, hurt first by a year-long crypto rout that engulfed the whole market and then again by FTX's fall. SOL dropped as much as 12% on Wednesday alone on concern large holders are offloading the token, which is used as the base cryptocurrency for financial transactions on the blockchain.

Anatoly Yakovenko, co-founder of Solana Labs, the startup that developed the blockchain, said in an interview earlier this month that he doesn't usually comment on price, and that the focus instead should be on 'the technology and having people build something awesome that's decentralized.' But the collapse of FTX is having an impact -- both personal and professional -- on Solana and its founders. And the token's drop can be seen as an expression of waning confidence in the whole platform, which at its peak sported a market value of almost $80 billion and is now a tiny fraction of that.

Yakovenko said roughly 4% of teams building projects on Solana now were acutely affected by FTX's collapse. Some platforms had funds custodied on the crypto exchange. About 80% of teams on Solana's blockchain had no exposure at all to FTX, Yakovenko said, referring to survey data, adding that he was connecting severely impacted founders with investors who could potentially provide emergency capital. 'There's definitely more to Solana than FTX,' Yakovenko said. Still, the network's longstanding ties to FTX and Alameda Research, the crypto trading firm co-founded by Bankman-Fried, may make it hard for some to move past the association. The two firms helped support Solana by purchasing SOL tokens in bulk from the Solana Foundation, the nonprofit that helps support the blockchain. Alameda also bought large quantities of SOL from Solana Labs. Alameda and FTX's venture arm also invested in multiple projects that operated on Solana, while FTX built its own projects on the network, including the decentralized finance platform Serum. These types of efforts, from an industry leader with substantial influence in the market, helped introduce Solana to many crypto users, Gokal said.

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