’s TVL sees an impressive climb, marking its highest for the year.
- The network’s native SOL token is also on the rise, showing significant gains.
- However, concerns over the FTX estate’s SOL liquidation loom large.
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Delve into the ascent of Solana’s TVL in 2023, its challenges, and the potential market impacts of the FTX estate’s actions.
Impressive Metrics for Solana in 2023
Solana’s total value locked (TVL) reached a commendable $338.82 million this Monday, according to DefiLlama data. This stands out as the highest since the beginning of the year. Representing the money flowing in a network’s DeFi apps, the TVL saw a notable 4.15% increase in just 24 hours, from $324.64 million on Sunday to $338.82 million by Monday. Behind this surge are significant Solana-based projects such as Drift, marginfi, Solend, and more. Additionally, the SOL token has enjoyed a robust week, with a 29% rise and a significant 65% jump from its lowest 2023 price.
SOL Token’s Market Performance
The SOL token has undoubtedly been on a bullish trajectory. It has surged by 39.08% from its low in September. Trading at $24.42 at press time, this performance reflects a resurrection of sorts for SOL, especially considering the bearish market shadows of the past. However, it’s essential to note that the current figures are still a fraction of what they were during the bull market peak, with Solana’s TVL soaring above $10 billion in November 2021 before a steep decline.
FTX Estate and the Shadow Over SOL’s Recovery
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Despite the optimistic numbers, the recovery is not set in stone. There’s a palpable anxiety about the potential impact on SOL’s price after the FTX estate received the green light to liquidate its crypto holdings. Possessing approximately $1.2 billion in SOL, a massive chunk of about 22 million SOL tokens, equivalent to $400 million, is unlocked and ready for sale. This accounts for almost 4% of SOL’s entire supply. Furthermore, an additional 40 to 44 million tokens or roughly $860 million remain staked, with an estimated $17 million in SOL set to be unlocked monthly for the next four years. Solana was notably affected by the FTX collapse, revealing the interlinked nature of the layer.1 blockchain with Bankman-Fried’s ventures.
Solana, Bankman-Fried and the FTX Debacle
The connection between Solana and FTX extends deep. The Solana Foundation disclosed in a November 2022 blog post the intertwined nature of its dealings with Bankman-Fried’s companies. The Foundation held about $1 million in cash or similar assets with FTX until a significant date – November 6, 2022, when FTX paused customer withdrawals. This sum is less than 1% of its entire assets. Additionally, the Foundation owned a substantial share in FTX Trading LTD, holding about 3.24 million shares. They also had around 3.43 million FTT tokens and a staggering 134.54 million SRM tokens from Project Serum, a decentralized exchange on Solana initiated by Bankman-Fried in 2020.
The soaring metrics for Solana in 2023, especially its TVL, are undeniably promising for stakeholders and investors. However, the looming concerns over the potential market impacts of the FTX estate’s liquidation activities present a challenge. It underscores the complex and interconnected nature of the crypto landscape, where the actions of one entity can significantly ripple across multiple platforms. As the year progresses, it will be crucial to observe how these developments shape Solana’s trajectory and the broader crypto ecosystem.