Solana (SOL), one of the main cryptos to have been affected in the FTX turmoil, is continuing to plummet. Solana native token SOL is down 31.96% in the last 24 hours, according to CoinMarketCap, and is currently trading at $14.83.
In addition, SOL lost its spot among the top 10 cryptos by market cap to Polygon (MATIC).
Just a few days ago, Google cloud computing division announced that it is running a validator node on the Solana blockchain. Following that, SOL saw a 12% spike, hitting a high of $38.55, but subsequent developments have cause its price to fall.
The backstory in brief
It all began when news of FTX’s possible liquidation began to do the rounds. Analysts began to speculate that Alameda might need to sell some of its SOL tokens to raise liquidity. As a result, SOL’s price slipped by 10.81% on 8 November.
Binance Chain CEO Changpeng Zhao’s proposal to acquire rival FTX propelled it to cross the $30 mark for a while. But Binance backed out on the acquisition in less than 24 hours.
The staking side of the story
Meanwhile, the Total Value Locked (TVL) on the Solana chain has dropped 32.4% in the last 24 hours, according to DefiLlama. TVL includes assets locked in as part of staking, lending, and liquidity pools. At publishing time, Solana’s TVL has fallen to $423.68 million—a massive decline from its all-time-high of $10.17 billion in November 2021.
As a result of the developments on the FTX front, CoinDesk reports, SOL investors have even taken to demanding that the tokens they staked on the underlying protocol be returned to them.
Several of Solana stakers, who play a key role in ensuring security on the blockchain, are also set to unlock nearly $800 million worth of their SOL, according to Solana Compass’ blockchain data. The unlocking, which is being named “Epoch 370,” will happen during the latter part of today. About 55 million SOL tokens, worth around $776 million, are scheduled to be unlocked.
About 76% of eligible SOL tokens are currently being staked on the blockchain. The scheduled unlock will involve close to 15% of the token’s circulating supply.
Once the tokens are unlocked, CoinDesk further reports, analysts are speculating that investors might dump the soon-to-unlocked SOL tokens. If that happens, SOL’s position in the market may be further affected.
