The Sam Bankman-Fried-backed crypto Solana has lost nearly all its value this year and is still crashing as key projects bail
- Solana, once praised as a viable rival for Ethereum, has tumbled almost 70% since the collapse of Sam Bankman-Fried's empire, and is down 94% in 2022.
- The token was heavily backed by Bankman-Fried, and his companies held large positions on their books.
Sam Bankman-Fried touted Solana this summer as the most underrated cryptocurrency, but the token is now down 94% for the year after crashing 70% since the collapse of FTX in November.
Solana, which was once praised as a viable rival to the second-most popular crypto Ethereum, dropped 7% Wednesday to hover around $10, far below its all-time high of $259.99 reached in November 2021.
The latest decline comes as more crypto projects bail on the Solana ecosystem. On Monday, CoinDesk reported that two of the Solana blockchain's top NFT collections, DeGods and Y00ts, will migrate to Ethereum and Polygon, respectively.
Solana's decline follows years of support and investment from Bankman-Fried and his subsidiaries.
In 2021, Solana Labs raised $314.2 million, and received substantial backing from Alameda Research. The firm also had the token as its second largest investment.
Later, Bankman-Fried also began building a decentralized exchange called Serum using the Solana blockchain.
In November, the Solana Foundation team released a blog post explaining the financial ties between the token and Bankman-Fried's empire. FTX and Alameda had purchased over 50.5 million Solana tokens — now worth about $500 million — that would remain "locked" until 2028.
But Solana Foundation also had roughly $1 million in cash or assets on the FTX platform as of November 6, when the exchange had to pause customer withdrawals due to liquidity shortages.
It remains unclear what will happen to these holdings during FTX's bankruptcy proceedings. Meanwhile, Solana Compass data cited by Forbes showed that Alameda's liquidators now hold over half a billion dollars worth of the crypto.