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Solana Discloses Losses From FTX Collapse

Serum DEX Heavily Impacted

Solana Discloses Losses From FTX Collapse

The Solana Foundation and Solana Labs have disclosed their asset exposure and transaction histories linked to bankrupt crypto exchange FTX and its sister trading firm Alameda Research.

On Nov. 11, FTX.com and Alameda Research filed for Chapter 11 bankruptcy. The firms had strong ties to the Solana ecosystem, which spurred panic among investors.

The Solana Foundation, a non-profit organization based in Switzerland that supports the Solana blockchain, revealed that it had approximately $1M in cash or cash equivalents in FTX before the exchange paused withdrawals. According to the foundation, this represents a negligible amount of its holdings.

The foundation also holds 3.24M common shares in FTX Trading Ltd, along with 3.43M FTT tokens and roughly 135M SRM tokens. All these assets are stuck on the FTX exchange.

In total, the Solana Foundation and Solana Labs sold 58.08M SOL tokens to Alameda Research and FTX Trading, representing nearly 11% of Solana’s total supply.

Wrapped Assets Depeg

In the wake of FTX’s collapse, soBTC and soETH are being dumped by investors as both tokens were issued by FTX. These wrapped assets are supposed to be backed 1-to-1 by native Bitcoin and Ether but the fate of the collateral is now in question.

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FTX-Backed Bitcoin and Ether Tokens Depeg On Solana

soBTC Is Trading at a 50% Discount

The Defiant The Defiant

Both assets are in freefall, with soBTC trading at $1,368 and soETH trading at $250.

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Serum Community Fork

Serum, an order-book-based DEX, which is the primary source of liquidity for many of Solana’s protocols, is believed to be compromised.

“The Serum program update key was not controlled by the SRM DAO, but by a private key connected to FTX. At this moment no one can confirm, who controls this key and hence has the power to update the Serum program, possibly deploying malicious code,” said Mango Max, an anonymous Solana developer.

Mango Max and other Solana developers have banded together to fork the protocol in the aftermath of the $650M FTX hack on Nov. 12.

Many leading Solana dApps have dropped support for the legacy Serum protocol. These include Magic Eden, the leading NFT marketplace on Solana and Phantom, a crypto wallet.

Meanwhile, DeFi lender Mango Markets has confirmed that it will support Serum’s community fork when it launches its V4 iteration.

Serum’s native SRM token has cratered by nearly 72% to $0.21 in the past week.

On Nov. 13, the Crypto.com exchange paused SRM deposits and withdrawals.

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