It has been a month since the collapse of FTX made headlines and Solana, one of the most thriving blockchain ecosystems these last few years took a big hit. The SOL token value fell considerably as FTX was considered one of the biggest backers of Solana. Given the bearish influence that has been prevalent in the market most of this year (2022) and Solana’s past outages and fall of various crypto gains this year, there is a huge wave of market fear over what happens to Solana now.
Will Solana fully recover from the impact of FTX’s collapse, what direction will Solana ecosystem’s development take and what happens to its existing projects? Given Solana blockchains’ billion-dollar valuation, why did these questions pop up with the collapse of just one of its backers — the FTX exchange? FTX was considered its biggest and primary backer for the Solana ecosystem. Since its inception, FTX has contributed significantly to the development of Solana in more than one way such as listing Solana’s SOL token on its front page and choosing to invest in and list many of Solana’s projects and also helping build one of Solana’s largest DEX platform — Serum.
Cause for the Decline -
The main reason for such doubts circling in the market is due to the sharp fall of the SOL token price. Several factors have contributed to the fall in the price of SOL tokens over the last couple of weeks. But, the most prominent factors that led to price decline include — huge exposure stemming from SOL tokens owned by FTX and Alameda research, sharp market-wide sell-off driven by speculation and fear-driven momentum, unstaking of SOL tokens and reduction in stablecoin activity.
Given that it has been about a month since FTX collapsed, a lot of murky speculative rumours and opinion/influence-driven momentum has disappeared. We are able to see a clearer picture of what’s happening these days. While it is a cause for concern when the token value of any huge project like Solana plummets so much in such a short time, the price of Solana tokens managing to retain a strong support level shows that the Solana ecosystem is backed by solid fundamentals and its dApps/DEX ecosystem is properly managed.
Current status -
This is evident as most tokens facing such decline would typically completely tank due to various reasons such as fear-driven momentum, improper internal management, increase in bad debt driven by mass liquidation and fall in token price etc. But, Solana has managed to maintain clear support towards the downside and contrary to past occurrences, the Solana network didn’t even see any outages despite its market-wide large sell-off activity during the course of the FTX crash-driven price activity. This shows that Solana continues to remain resilient despite the impact of the FTX collapse.
Future Outlook -
Solana had learned from its past experiences and built a robust internal infrastructure to support its core architecture. Solana is known for its user-friendly developer ecosystem and high TPS output. The crypto world is currently facing a bear market scenario and this has resulted in more cautious user activity. Solana managing to retain strong support to the downside now shows that those who struck around after all that occurred are loyalists and people who see actual real-world use-case potential in the Solana ecosystem.
As the ecosystem grows and the adoption of Solana dApps in the real-world increases, the value of SOL tokens will slowly recover their lost ground. Those who approach the Solana ecosystem in future and those who struck around will look for ways to adapt to existing circumstances and improve further. One such way for developers to improve their business is by increasing the flow of liquidity and reaching out to a wider user audience. This can be achieved by engaging in a true on-chain cross-chain transaction environment that helps developers interact with peers and users from other blockchain networks.
Kana Labs platform is a great choice for those on the lookout for such cross-chain product solutions. The Kana Labs product suite is a chain-agnostic multi-chain DeFi super app built with true on-chain cross-chain communication bridges as core further supported by liquidity aggregation across a wide range of dApps and a multi-chain wallet. This allows users to access DeFi operations in a simplified and user-friendly manner in a single UI. We currently provide liquidity aggregation on dApps across Solana and Aptos ecosystems, true non-EVM cross-chain swaps between Solana and Aptos ecosystems and aggregated staking in Solana and Aptos ecosystems. You can check out Kana Labs at → https://www.kanalabs.io
