Solana Generates $1 Billion in Returns for Multiple Early Backers (theinformation.com) 16
An underwater hockey league connected the founders of the Solana blockchain to investors who bought the Solana token. The 4,300-fold increase in the price of the blockchain's tokens explains why more VC funds want to hold these assets. The Information: When Solana Labs CEO Anatoly Yakovenko tried to raise money in 2018 to develop his idea for a faster blockchain for financial transactions, bitcoin prices were diving and investors were leery of blockchain startups. Then the former Qualcomm engineer convinced a friend he met playing underwater hockey to become an early investor. And that swim buddy went on to introduce Yakovenko, 41, to two other backers. Later that year, the five co-founders of Solana Labs sold 79.25 million tokens for pennies each to help the startup develop the Solana blockchain. Some of the early token buyers, including Multicoin Capital, 500 Startups and a founder of Race Capital, have reaped huge gains from these first sales, in some cases generating $1 billion in returns. The spike in tokens like Solana, which are worth about 4,300 times their initial sales price, explain why traditional venture capital firms such as Andreessen Horowitz and Sequoia Capital are shaking up their legal structures to hold more digital assets. This is how Solana's first backers got in on one of the biggests scores in crypto investments.
The Solana token, which confers ownership rights to the Solana blockchain, is now the world's fifth most valuable, with a market capitalization of about $50 billion, according to CoinMarketCap. Altogether, Solana Labs has sold 307 million SOL tokens, which have helped power the 78-employee startup's growth and the blockchain's development in lieu of equity financing. Solana token prices have jumped as the blockchain proved it can handle transactions faster than standard financial institutions. It also outperforms Ethereum, an older blockchain technology underpinning decentralized finance, or DeFi, a peer-to-peer system where financial transactions are completed without an intermediary. The Solana blockchain can already complete 65,000 transactions per second compared to 1,700 for credit card processor Visa and just 15 for Ethereum. An Ethereum upgrade expected for next year aims to bump that rate to 100,000 transactions, but that transition has been delayed for almost two years.
The Solana token, which confers ownership rights to the Solana blockchain, is now the world's fifth most valuable, with a market capitalization of about $50 billion, according to CoinMarketCap. Altogether, Solana Labs has sold 307 million SOL tokens, which have helped power the 78-employee startup's growth and the blockchain's development in lieu of equity financing. Solana token prices have jumped as the blockchain proved it can handle transactions faster than standard financial institutions. It also outperforms Ethereum, an older blockchain technology underpinning decentralized finance, or DeFi, a peer-to-peer system where financial transactions are completed without an intermediary. The Solana blockchain can already complete 65,000 transactions per second compared to 1,700 for credit card processor Visa and just 15 for Ethereum. An Ethereum upgrade expected for next year aims to bump that rate to 100,000 transactions, but that transition has been delayed for almost two years.
Recipe for success (Score:5, Interesting)
1) Create worthless new crypto currency.
2) Sell 90% of it to venture capital fund
3) Wait for venture capital manipulation and crypto frenzy to jack up price of remaining crypto you hold.
Prediction... (Score:3)
All of this cryptocurrency/blockchain stuff is going to cause the next global financial meltdown reminiscent of the 2008 crisis.
Re: (Score:3)
I don't think it plays a big enough role in the global economy to really break anything.
To me though, it does appear to be a symptom of broader problems. There is an awful lot of speculation happening everywhere, a sports car market bubble, luxury good bubble (e.g. watches are sold out and selling used for 2-3x retail), various stock market bubbles (e.g. EV stocks are completely disconnected from reality), etc. etc.
Problems? What problems? (Score:1)
To me though, it does appear to be a symptom of broader problems. There is an awful lot of speculation happening everywhere, a sports car market bubble, luxury good bubble ...
No worries, remember that bubbles expand forever and ever without consequence! Buy in and help the bubble expand just a bit further... it's only a wafer thin expansion.
Re: (Score:3)
All of this cryptocurrency/blockchain stuff is going to cause the next global financial meltdown reminiscent of the 2008 crisis.
When this happens, exclusive video of stockbrokers vainly trying to jump out of today's sealed windows will be sold as an NFT.
Greater fool theory (Score:1)
SOL... (Score:2)
used to be a TLA for "Shit Out of Luck".
Cash returns, or potential returns? (Score:5, Insightful)
The source seems paywalled, so let me ask. Did any of the investors cash out enough to claim $1B USD in profit? Or is this theoretical profit, value holds only as long as nobody sells any large numbers of tokens?
underwater hockey league (Score:4, Insightful)
Is that a hockey league that is in serious financial straits, or is it a hockey league that somehow plays at the bottom of a swimming pool?
A little editorial clarity, please?
Re:underwater hockey league (Score:5, Funny)
It's just a regular hockey team, but with climate change problems.
Re: (Score:1)
As a man who has played street hockey for over 25 years, the statement underwater hockey league confused me.
Street hockey with a ball is close enough to ice hockey with a puck. But underwater hockey? I can't even fathom how that would be played.
I'll see myself out.
We live in a world gone mad (Score:2)
Used to be, only the most irresponsible (or wealthy) of speculators could 'play' deliberately in bubbles.
Now we have the fucking government pretending these things are meaningful.
Or is it that deep down they understand in a way most people don't that the very value of fiat paper currency isn't that much different?
Seems to me that elevating cryptos might just ultimately bite them in the ass.
Money for nothing? Chicks for free? (Score:2)
And they're not even installing microwave ovens or custom kitchens.
Sources? (Score:1)
"compared to 1,700 for credit card processor Visa"
Highly unlikely. I think the author forgot a few 0's... probably purposely to make this blockchain look good.
Seriously, are we really supposed to think Visa can only handle 1700 transactions per second? I'm fairly certain they clear that many transactions in a fraction of a second, and non-stop too.
Re: (Score:3)
FWIW, the 1700 tps figure comes from an article... published by Bitcoin.com. With zero references to boot.
In reality Visa is processing roughly ~20,000 tps, all year round.