‘We were worried about ecosystem startups' — Solana CEO on FTX collapse
The now-infamous collapse of FTX sent shockwaves through the broader cryptocurrency space in 2022, but the Solana ecosystem was particularly hard hit in the fallout.
Speaking exclusively to Cointelegraph at the latest edition of the Solana Breakpoint conference hosted in Amsterdam, Solana co-founder and CEO Anatoly Yakovenko recalls his concern for several projects that were building on the layer 1 smart contract blockchain protocol.
“I was more worried about the ecosystem of startups; we didn’t know how exposed teams were,” Yakovenko explains. Solana’s native token SOL saw a significant drop in value in the immediate wake of FTX’s bankruptcy, with its token trading at $36 in early Nov. 2022 before dropping as low as $12 in the days after the exchange’s collapse.
Related: Sam Bankman-Fried found guilty on all 7 charges in FTX fraud trial
Solana’s brainstrust and several investors contacted hundreds of teams building products, services and decentralized applications to take stock of the collateral damage. According to Yakovenko, about 20% of Solana-based projects had received investments from FTX or Alameda Research and just 5% of ecosystem startups had funds sitting on the defunct exchange.
Yakovenko empathized with founders who had toiled to raise capital and placed their trust in FTX as the custodian of those funds. “You keep it in an exchange that everyone seemed to trust and boom, it's gone. It was a catastrophic failure for those companies,” he added.
A prime example was Armani Ferrante, who had raised some $20 million to build out Solana-based cryptocurrency infrastructure firm Coral. The engineer has previously estimated that his company lost around $14.5 million it had held on FTX.
While Yakovenko concedes that
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