Solana Blockchain Hit by FTX Tremors as Nearly $800M SOL Tokens Set to Be Unstaked
The scheduled-to-be-unlocked SOL tokens represent approximately 15% of its circulating supply.
The epic comedown of Sam Bankman-Fried’s FTX crypto exchange and Alameda Research trading firm are making waves in the market for the Solana blockchain’s SOL token – to the point where some investors have apparently become so nervous that they’re demanding back tokens they had “staked” or deposited into the blockchain’s underlying security protocol.
Earlier this week, when concerns started to grow over the state of the two businesses’ finances, crypto market analysts began to speculate that Alameda might need to sell some of its SOL tokens to raise liquidity. The fears sent the SOL price tumbling – as traders rushed to get ahead of the selling pressure.
Now, apparently, the dynamic has risen to another level: Solana validators who provide security to the blockchain are set to unlock nearly $800 million worth of their SOL holdings as the end of the token lock-in period known as “Epoch 370” approaches – in fewer than 13 hours.
And analysts are speculating whether investors might dump these soon-to-unlocked SOL tokens as soon as they recover them. SOL's price recently plunged 42% to less than $14 in the past 24 hours.
“A reduction in the amount of SOL staked might indicate that investors are looking to sell all or part of their position,” Sean Farrell, head of digital asset strategy at research firm FundStrat wrote in a note on Tuesday evening following the bailout news. “Due to these factors, we think it is wise to reduce exposure to Solana (SOL) in the immediate term.”
Solana Compass’ blockchain data showed that about 55 million SOL tokens, worth around $776 million, are scheduled to unlock.
There’s about 76% of eligible SOL tokens currently being staked on the blockchain. The scheduled unlocked tokens represent around 15% of the token’s circulating supply in a single unlock.
Read More: Staked SOL Tokens Falter as Solana Traders, Stakers Rush for Exits
Riyad Carey, research analyst at crypto data firm Kaiko, told CoinDesk Monday that SOL is Alameda's second-largest holding, and it also holds significant amounts of SOL ecosystem tokens like MAPS and OXY. MAPS was recently down 20% to $0.1, while OXY was down 14% to $0.03, according to CoinGecko.
Source : news.google.com/__i/rss/rd/articles/CBMifmh0dHBzOi8vd3d3LmNvaW5kZXNrLmNvbS9tYXJrZXRzLzIwMjIvMTEvMDkvc29sYW5hLWJsb2NrY2hhaW4taGl0LWJ5LWZ0eC10cmVtb3JzLWFzLW5lYXJseS04MDBtLXNvbC10b2tlbnMtc2V0LXRvLWJlLXVuc3Rha2VkL9IBAA?oc=5 undefined - November 10, 2022