FTX Contagion Is Spreading To the Solana Ecosystem (axios.com) 63
Solana's SOL is down much further than any of the other major cryptocurrencies today, all of which are down badly following the sudden unraveling of the wildly fast growing crypto exchange FTX on Tuesday. Axios reports: Blockchain principles aim to instantiate the ideals of decentralization. That is, no single points of failure. Blockchain realities, though, show that each community tends to have its major leaders. For Solana, one of those was definitely FTX's c0-founder, Sam Bankman-Fried (SBF). SBF has long been bullish on Solana, including working to build Serum, an order book style exchange that runs in a decentralized fashion. His firms are rumored to have owned a substantial amount of the total SOL supply.
FTX and Alameda Trading are in trouble. If they hold large amounts of SOL, they are very likely to exit those positions, which will tank SOL price. CoinDesk reported on Nov. 2 that Alameda had $292 million in SOL and $863 million in locked SOL (on the Solana blockchain, large holders can earn more by backing the blockchain's validators by committing not to sell -- or locking -- for a certain period of time). "People are dumping already -- self-fulfilling prophecy," Economics Design's Lisa Jy Tan told Axios over Twitter DM. Tomorrow, the entities verifying the Solana blockchain have already publicly indicated their intention to unlock about a billion dollars worth of SOL (at current prices), about 17% of its market cap. It's reasonable to expect they might intend to sell.
Solana's fall has put stress on one of its leading decentralized finance applications, Solend, a money market that works much like Ethereum's Compound. Solend is gradually unwinding a single, almost $30 million USDC (stablecoin) loan, collateralized by SOL, which is falling fast while the protocol tries to sell. Much like SOL's price, the total value locked (TVL) in various DeFi projects on Solana has fallen much further in the last day than on other smart contract blockchains, according to DefiLlama. Solana TVL is down 45% over the last day, to $470 million, as of Wednesday afternoon, New York time.
FTX and Alameda Trading are in trouble. If they hold large amounts of SOL, they are very likely to exit those positions, which will tank SOL price. CoinDesk reported on Nov. 2 that Alameda had $292 million in SOL and $863 million in locked SOL (on the Solana blockchain, large holders can earn more by backing the blockchain's validators by committing not to sell -- or locking -- for a certain period of time). "People are dumping already -- self-fulfilling prophecy," Economics Design's Lisa Jy Tan told Axios over Twitter DM. Tomorrow, the entities verifying the Solana blockchain have already publicly indicated their intention to unlock about a billion dollars worth of SOL (at current prices), about 17% of its market cap. It's reasonable to expect they might intend to sell.
Solana's fall has put stress on one of its leading decentralized finance applications, Solend, a money market that works much like Ethereum's Compound. Solend is gradually unwinding a single, almost $30 million USDC (stablecoin) loan, collateralized by SOL, which is falling fast while the protocol tries to sell. Much like SOL's price, the total value locked (TVL) in various DeFi projects on Solana has fallen much further in the last day than on other smart contract blockchains, according to DefiLlama. Solana TVL is down 45% over the last day, to $470 million, as of Wednesday afternoon, New York time.
"decentralized" (Score:5, Insightful)
You keep using that word. I do not think it means what you think it means.
Re:"decentralized" (Score:5, Funny)
It means you get fucked from multiple simultaneous directions without warning.
Re: "decentralized" (Score:4, Interesting)
Re:"decentralized" (Score:5, Insightful)
We are exactly one year out from the crypto peak. Go to Coinbase and click on any coin or token, do the "1 year" chart, and ever single one is down between 75-98%. EVERY ONE. In one year.
Re:"decentralized" (Score:5, Funny)
Go to Coinbase and click on any coin or token, do the "1 year" chart, and ever single one is down between 75-98%. EVERY ONE. In one year.
But... but HODL! Buy on the dip! Store of value! Fiat currency!
How can so many slogans be just B S?
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But I hired microservice edge-cloud quantum lawyers.
No, "deregulated" not "decentralized" (Score:2)
It's far better to have it be "deregulated" rather than "decentralized".
DeFi == deregulated finance
It's also more honest.
Old saying on Wall Street (Score:5, Insightful)
Nobody knows who's naked until the tide goes out.
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FTX took a huge bet and lost; ergo FTX had a management issue. FTX is only naked because FTX decided to bet its clothes on nothing of intrinsic value. Business 101 says don't do that.
Re:Old saying on Wall Street (Score:5, Insightful)
FTX took a huge bet and lost; ergo FTX had a management issue. FTX is only naked because FTX decided to bet its clothes on nothing of intrinsic value. Business 101 says don't do that.
No, this little debacle is not FTX's main problem. The start of this melt-down was this report on 2 November [coindesk.com] which revealed that most of FTX's "assets" were just tokens created by SBF'sother company Alameda. Such self-dealing would make the CEO of Enron blush.
That this was financial fraud skated as long as it did was because "unregulated".
FTX is only naked because it was a massive scam run by its creator/owner.
These guys always seem to think the fraud can run forever.
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It wasn't fraud.
It was "alternative finance".
Because "this time it'll be different! Everything has changed! The rules no longer apply!"
Tulips.
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Funny, they make funny virtual coins and collect a fortune. If I print a physical object, the secret service calls it 'counterfeiting' and they lock me up.
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Either that, or they overestimate how long it will take for people to catch on and hang on to it too long.
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Nobody knows who's naked until the tide goes out.
Nobody knows who's naked on Wall Street because bad bets frequently get covered by tax payers. Or at least federal debt and money printing. The naked ones are whomever doesn't have the pull to get saved by politicians.
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Or at least federal debt and money printing.
Crypto gets bailed out by scamming, personal debt, and printing more cryptocurrencies.
Everyone in crypto is naked (Score:3)
Every god damn one of them are nude as jaybirds.
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The expression is 'for all intents and purposes'.
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The GoogleBing failed me (Score:1)
Okay, spank me with an out-of-touch geezer noodle, but I cannot figure out the difference between a "contagion" and a virus or worm.
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I'm probably retardedly wrong on this, but then again, I don't give a fuck about anything crypto.
definition (Score:2, Interesting)
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That sounds like "fad" to me.
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When it comes to social-crypto-shit, YES!
Rename solana (Score:2)
Re: Rename solana (Score:2)
So SOL is SOL (Score:2)
Seriously, who picks "SOL" as a name for anything you want people to have confidence in?
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I think SOL is just a victim here, it is FTX that is FUBAR
PUD come back! (Score:4, Funny)
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Nobdy cares (Score:2)
Re: SOL? (Score:2)
Sue's on first? (Score:2)
So FUBAR is suing SOL, who claims it's WTF's fault?
shut up about ftx (Score:1)
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Hey, I need to watch *something* while eating this big bag of popcorn I'm having right here...
Re: shut up about ftx (Score:3)
Just as a suggestion, Elon Musk is about a hundred times more entertaining right now.
Correction... (Score:4, Funny)
"Ecosystem" should read: "RICOsystem"
I am surprised (Score:2)
Re: I am surprised (Score:2)
Yeah, I'm not sure why, but my guess is that a couple of events may have sped it up.
One is the insane inflation caused by the Russo-Ukranian war. Precisely one of the use cases that cryptocurrency claimed, and they are nowhere to be seen.
The other is the slow implosion of social media giants; FB with the Metaverse and Twitter with whatever the hell Elon Musk thinks he's doing. Again this was a claimed use case for Web3, and again they are nowhere to be seen.
People seem to be realising that blockchain is use
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Predictable (Score:2)
All those dominoes are falling like a house of cards. Checkmate.
is there a feed setting... (Score:2)
Maybe just blocking Beauhd?
Why is crypto worth anything? (Score:2)
I've never understood why it should be. Its just people speculating that there are greater fools who will take this useless stuff off their hands at a better price. Its completely useless, there is no reason to want to hold any other than that you expect other people to pay more for it. You can't do anything with it other than sell it.
I would expect it to eventually fall to zero and be a chapter in a new edition of Great Popular Delusions and the Madness of Crowds, or its latter day equivalent.
Or maybe
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It's only worth something if people think it's worth something and are willing to pay for it. It has no intrinsic value -- it can't be eaten, it can't be used to build or manufacture anything, it can't be burned for heat, etc. (The energy wasted in mining doesn't count lol.)
With all of the marketing hype, fools were convinced it was worth something for a while and were willing to pay for it, but now more and more people are waking up to realize the truth, and the actual value is correcting back to where i
Can someone translate the headline into English? (Score:2)
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Possibly great opportunity to make money (Score:3)
If it crashes hard like Luna did, throw some lottery money at it. If it hits $0.20, there's a good chance that morons on Twitter and Reddit will start buying the dip a la Luna Classic. That's how /biz shitposters turned hundreds of dollars into tens of thousands. They knew the morons wouldn't stay away.
Not financial advice, but if LC is any indication of what idiots with money can do, buying the crash (the crash, not dip!) could potentially turn $100 into $5k-$10k.