In 2022, the cryptocurrency world experienced a seismic event when FTX, a prominent exchange, suffered a catastrophic collapse, sending shockwaves throughout the industry.
Among those hit hardest by this turmoil was the Solana ecosystem, a layer-1 smart contract blockchain protocol.
Anatoly Yakovenko, the co-founder and CEO of Solana, shared his concerns during an exclusive interview with Cointelegraph at the Solana Breakpoint conference in Amsterdam.
Yakovenko expressed his worries about the numerous projects that had been building on Solana.
The aftermath of FTX’s bankruptcy saw Solana’s native token, SOL, plummet in value from $36 in early November 2022 to as low as $12 in the days following the exchange’s collapse.
Solana’s leadership and investors took immediate action, reaching out to hundreds of teams working on products, services, and decentralized applications within the ecosystem to assess the extent of the damage.
Approximately 20% of Solana-based projects had received investments from FTX or Alameda Research, and just 5% of ecosystem startups had funds tied up in the now-defunct exchange.
This loss of funding severely impacted many startups’ ability to continue their work, causing their runway to evaporate.
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One notable case was Armani Ferrante, who had secured around $20 million to develop Coral, a Solana-based cryptocurrency infrastructure company.
Ferrante estimated a loss of approximately $14.5 million due to the FTX collapse.
Despite such setbacks, founders like Ferrante displayed resilience, using the failure as motivation to rebuild their companies from the ground up.
While SOL’s price drop was distressing, Yakovenko emphasized that the real tragedy was the harm done to ecosystem projects.
He expressed relief that the majority of teams managed to survive despite the challenging circumstances.
As the one-year anniversary of FTX’s collapse approaches, some positive developments have emerged.
Sam Bankman-Fried, the former CEO of FTX, faced a high-profile criminal trial and was found guilty on all seven charges on November 3, with sentencing scheduled for March 2024.
There is a silver lining for the Solana ecosystem, as investors have recognized that FTX’s influence had hindered the growth of the new generation smart contract layer 1.
Ethereum venture capital investor Chris Burniske played a crucial role in highlighting the value proposition of Solana, encouraging people to explore the platform as a viable alternative.
This influence has contributed significantly to the ecosystem’s recovery and resurgence, demonstrating its resilience in the face of adversity.
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