Solana, Closely Linked to FTX, Plummets 60% in One Week

Down 9.64% from the Previous Day
Greater Decline Compared to Other Coins

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] In the wake of the global cryptocurrency exchange FTX's bankruptcy crisis causing a sharp drop in coin prices, Solana, which has maintained a close relationship with FTX, is experiencing a relatively larger decline.

According to the global cryptocurrency market tracking site CoinMarketCap as of 8:44 a.m. on the 14th, Solana's price was recorded at $13.20 (approximately 17,410 KRW), down 9.64% from the previous day. Compared to a week ago, it has plummeted by 59.74%. Compared to other well-known coins such as Bitcoin (-22.06%), Ethereum (-22.70%), Ripple (-28.47%), and Dogecoin (-26.16%), the drop is more pronounced.

Solana refers to both a blockchain platform and the cryptocurrency that serves as the native currency within it. The Solana blockchain attracted market attention by emphasizing its fast processing speed compared to existing layer 1 blockchains like Bitcoin and Ethereum. It combined the proof-of-stake (PoS) method, where cryptocurrency holders participate in block verification and creation in exchange for coins, with proof-of-history (PoH) technology. By storing the occurrence time on blocks, it sped up transaction verification compared to the previous method of random ordering. Additionally, Solana claims that the improved processing speed has led to lower fees.

Solana, which improved processing speed and scalability, has maintained a close relationship with Sam Bankman-Fried, CEO of FTX. CEO Bankman-Fried expressed support by saying, "The most undervalued coin is Solana." He also created Serum, a decentralized finance (DeFi) project based on Solana. FTX's non-fungible token (NFT) marketplace supports trading with both Solana and Ethereum.

Because of its entanglement with FTX, the impact on Solana is considered inevitable. An industry insider said, "FTX was a major backer of Solana, and with this crisis, the Solana ecosystem is being adversely affected overall."

This content was produced with the assistance of AI translation services.