Solana Feels Ripple Effect of the FTX Collapse, Crypto.com Halts Solana, USDC and USDT Withdrawals and Deposits The cryptocurrency exchange has cited recent industry events in an email to its users to halt the flow of the tokens
Opinions expressed by Entrepreneur contributors are their own.
You're reading Entrepreneur India, an international franchise of Entrepreneur Media.
The recent collapse of the Binance and FTX deal has sent ripples across the cryptocurrency market. The entire crypto market has been a witness of the topsy-turvy market since the beginning of the year.
The crash of FTX and Alameda research has sent the market in frenzy. Some investors are apparently demanding back tokens that they had 'staked' or deposited into the blockchain's underlying security protocol.
The state of Alameda Research and FTX earlier this week led crypto market analysts to believe FTX would be selling off a chunk of SOL tokens to raise liquidity amidst a liquidity crunch at FTX. The fear sent SOL prices tumbling.
However, there has been a shift in the dynamic of the situation as validators of Solana providing security to the blockchain are set to unlock 'Epoch 370' i.e. nearly $800 million worth of SOL holdings in less than 10 hours.
The time period of staking rewards being earned and issued is called 'Epoch' on the Solana blockchain. The process takes approximately two days when validators lock in the stake on the blockchain. The validators have the discretion to unlock the stake after the period is over.
Cryptocurrency exchange, Crypto.com has temporarily halted the flow of two top SOL ecosystem stablecoins as the FTX saga continues to drag on.
The cryptocurrency exchange has cited recent industry events in an email to its users to halt the flow of the tokens. "Suspending deposits and withdrawals of USDC and USDT on the Solana blockchain in the Crypto.com App and Exchange effective immediately," said the email.
The email also stated the deposits of other stablecoins including Ethereum and Cronos would not be impacted.
Considered as the active competitor of Ethereum, Solana is a smart contract platform that offers low fees and high speeds. Solana also hosts a range of DeFi apps. However, a large portion of its total supply comes is controlled by Sam Bankman-Fried's FTX and Alameda Research trading firm which has led to Solana's dismal state in the crypto market as of Wednesday.
SOL tokens have taken a plunge of approximately 42 per cent as a result of FTX's implosion. The current price is approximately 92 per cent below the price it was trading a year ago.