Solana has dropped nearly 96% in value, compared to Bitcoin and Ethereum’s 76% drop from their respective all-time highs during the same period month.
Six months after the event, Solana exploded in price and began to increase in value at breakneck speed. Solana price peaked near $260 in November 2021. Solana has dropped nearly 96% in value, compared to Bitcoin and Ethereum’s 76% drop from their respective all-time highs during the same period month.
Compared to Bitcoin and Ethereum, which both fell by 76% from their respective all-time highs during the same month, Solana has lost nearly 96% of its value.
Although the value of the top 2 cryptocurrencies, Bitcoin and Ethereum, stabilized last month, Solana continues to decline. In the early morning of December 29, 2022, the daily altcoin suddenly dropped below the $10 mark. This is the first time Solana’s value has dropped to single digits in nearly two years.
So what led to the significant drop of this once-favorite altcoin?
The Fall of FTX and Alameda Research
On November 12, 2022, Sam Bankman-Fried’s cryptocurrency exchange FTX posted a press release stating that it had filed for bankruptcy. As we know, former billionaire Sam Bankman-Fried has invested heavily in SOL and the ecosystem and is an ardent supporter of Solana. This shocking news caused the entire Crypto market to plummet and the Solana value also recorded a sharp drop.
The layer 1 blockchain platform coin was hit much harder than most other leading cryptocurrencies when the FTX empire collapsed in early November amid a liquidity crunch. This is certainly the result of the close connection with SBF and his businesses. In the days before the FTX crash, SOL was worth more than $37.
Drop due to a major hack on the lending protocol built on Solana
$100 million was stolen from DeFi platform Mango Markets. The hacker is holding that money hostage until the protocol clears the outstanding debts.
The total value locked (TVL) on the Solana blockchain has dramatically lowered as a result of the Mango Markets breach. For instance, it decreased in value from $1.32 billion on October 10 to $862 million within three days.
With this news following yet another network collapse, it appears that this month will be difficult for Ethereum’s main challenger. The network was unreachable on October 1 due to an incorrectly configured node.
The trend of moving to other blockchain networks of top NFT projects
Solana DeGods and y00ts-based NFT collections have announced that they will be leaving the blockchain in 2023 to explore new opportunities. This is also one of the reasons why Solana’s price continues to drop without stopping.
Despite some unsettling price-related news, Solana is still a currency that is worthwhile to invest in. Because of its sophisticated proof-of-stake consensus process and proof-of-stake, Solana is unmatched in terms of security and scalability.
Additionally, as Solana’s user base grows, the network’s scale and decentralization will make it more difficult for hackers to compromise security, and the likelihood of any downtime for the blockchain will decrease.
The article contains full information about the Solana project of Meta Lion Ventures: https://metalionventures.com/what-is-solana/