What to Know About Solana and FTX as the SOL Crypto Plummets

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In the last 24 hours, SOL prices have tanked by over 40%. Hitting a weekly high of $38.55 just days ago, the layer-1 network’s coin is trading at around $17 currently. These are far more noticeable losses than what many other cryptos on the market are facing; fellow layer-1 cryptos like Cardano (ADA-USD),  Tron  (TRX-USD) and  Polkadot  (DOT-USD) are losing by only 7% to 14% today.

Solana’s no worse a project than any of these competitors. In fact, it has been on the up-and-up in terms of big announcements and good news recently. The company’s Solana Mobile subsidiary is getting ready to roll out its Saga smartphone, has partnered with  Alphabet’s  (NASDAQ:GOOG, NASDAQ:GOOGL) Google Cloud and is readying a Web 3.0 store.

The reason the project is down so much, however, is because it’s far more intertwined with FTX than investors had previously known. And as a result of FTX’s liquidity crisis, the project is taking extra damage.

Sam Bankman-Fried, the founder of FTX and Alameda Research, was an early investor in Solana. After those companies began their fast fall yesterday as a result of a liquidity crisis, though, investors became worried that Alameda would sell off its more than $1 billion stake in SOL to scramble for funds. In turn, this has led to a massive SOL selloff that has tanked the coin.

Solana Prices Tumble Ahead of $900 Million Token Unlocking

The FTX news isn’t all Solana has to blame its downward pressure on. Sure, it might be unnerving to think Alameda Research could flood the market with SOL crypto. This fear is growing as Solana validators get ready to unlock a massive portion of the total SOL supply.

Indeed, Solana validators are getting ready to unlock a total of 49.6 million SOL from Solana’s stake. This will bring these coins to the free market for the first time ever. This SOL represents a whopping 13% of the coin’s total supply which has never been on the market. At current rates, this stash is worth about $900 million.

Validators choose when they want to remove their SOL stakings at the end of every network epoch. It appears that, thanks to the FTX news, many of these validators are licking their wounds and choosing to get money off of the chain. Nearly half of this SOL was scheduled to be unlocked overnight as the crypto world processed the news of FTX’s liquidity crunch and Binance’s (BNB-USD) subsequent letter of intent to acquire FTX.

So, $900 million SOL is unlocking at some point today and the beleaguered Alameda Research is holding $1 billion of the coin itself. Of Alameda’s SOL holding, $863 million is locked. It can be assumed, then, that Alameda accounts for the brunt of the unlocking Solana. This more or less confirms that the over-saturation of SOL is heading for the market — and confirms the fears that have been driving down prices overnight.