On December 1, 2021, Kyle Samani, the managing partner of Multicoin Capital, made a bold statement that “SOL (Solana) is about to receive huge buy orders because every billionaire in the world is calling me and SBF.” At that time, the unstoppable SOL was priced around $230.
But who would have thought that after a year, the price of SOL, the “deeply sought after by billionaires”, would fall below $10, dropping to a low of $8, a decrease of over 95%.
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After Kyle’s tweet, which is comparable to Do Kwon’s “Your size is not size”, the crypto winter arrived, and with the consecutive blow-ups of the Terra (Luna) ecosystem and Three Arrow Capital (3AC), market panic continued to spread. In the end, under the combined forces of internal and external factors, another supporter behind Solana, also the most influential one in the industry at that time, collapsed—FTX announced bankruptcy.
The bankruptcy of FTX and Alameda severely affected the entire Solana ecosystem. Not only did the Solana Foundation suffer over $180 million in cryptocurrency asset losses, but it also directly destroyed the important underlying protocol Serum in the Solana DeFi ecosystem. Because of the significant authority held by FTX, this foundational protocol was quickly declared ineffective.
Affected by this series of “devastating” events, Solana’s Total Value Locked (TVL) also dropped from a peak of $10 billion in the bull market to around $200 million.
The community wailed, and the SOL token continued to decline, seemingly unable to recover.
Confidence and Turning Point
On the fifth day after the SOL token fell to $8, Ethereum founder Vitalik Buterin tweeted,
“Some smart people told me that Solana has a sincere and smart developer community, and now those terrible opportunistic funds have been washed out, and this chain has a bright future.
I find it difficult to judge from the outside, but I hope the community has a fair chance to develop.”
Vitalik’s words seemed to be a reassurance, and the SOL token responded with an increase in price. The panic in the Solana community was alleviated during the subsequent continuous rise.
Not only in times of crisis, but in a Twitter AMA in late June 2023, Vitalik specifically mentioned Solana. In response to Matt Huang, the co-founder of LianGuairadigm, asking about “views on US cryptocurrency policy?”, Vitalik replied, “I feel sad that Solana and other projects have been hit in this way. Things shouldn’t have been like this. If Ethereum eventually “wins” by being kicked out of all other blockchains on exchanges, it is not a glorious victory and may not be a victory in the long run. Especially because the real competition is not other chains, but the fast-expanding centralized world that is putting pressure on us as we speak. I wish all good projects can achieve fair results.”
Aside from Vitalik, Chris Burniske, a representative of Placeholder, was also a major supporter during Solana’s collapse. On December 11, 2022, Chris stated that Solana and Cosmos were the two ecosystems he focused on the most, besides Ethereum.
In addition to continuously advocating for Solana on Twitter, Chris Burniske directly stated in an interview with Bankless in February 2023 that Solana was undervalued and had investment potential similar to ETH.
In March, Placeholder also led the investment in Tensor, an NFT trading platform on the Solana chain. The platform currently accounts for over 40% of the trading volume in the Solana NFT market, surpassing the largest NFT market on Solana, Magic Eden, at one point.
Not only did Solana receive external support and investment, but there were also new developments within its ecosystem.
Despite facing many controversies, Solana’s mobile wallet Saga successfully went live in April 2023.
Rollbit, a betting platform launched on Solana, experienced rapid growth in 2023. Although specific operational data is not available, as of the time of writing, its token RLB has increased more than 28 times this year.
Solana introduced state compression. The official statement indicated that the cost of minting 1 million NFTs has been reduced to approximately $110.
Solana’s on-chain data performance is also impressive. According to the data from Artemis, a blockchain analytics platform, the number of daily active addresses on Solana’s chain has consistently remained above 200,000.
Although the DeFi ecosystem on Solana’s chain has not yet recovered, the data for Solana NFTs in early 2023 ranked second only to Ethereum and recently dropped to second place due to the impact of Bitcoin NFTs.
In July 2023, Superteam organized the Solana Ecosystem Community Conference, which was attended by Solana co-founder Raj Gokal and former Coinbase CTO Balaji Srinivasan. The conference provided updates on the latest developments and projects of Solana, with over 2,000 community users participating. Moreover, in May, Solana also established a new Chinese community, synchronizing a series of key events related to Solana.
Facing a return to the public eye with a less dominant momentum than before, Solana may be as Mable, a former partner at Multicoin Capital, mentioned in the podcast “Solana’s Rise and Fall: A Lot of Accidents and a Few Inevitabilities.” Solana is highly likely not to die, but it will not thrive in the same way as before.