Anatoly Yakovenko, co-founder and CEO of Solana Labs, in an interview with Cointelegraph recalled the concerns about the fate of many blockchain-based projects sparked by FTX collapse.
The native Solana (SOL) token plummeted significantly following the exchange’s bankruptcy. In early November 2022 the asset traded around ~$36, and a few days after the collapse of Sam Bankman-Fried’s empire it fell to around $12.
“But what troubled me more was the startup ecosystem — we didn’t know how vulnerable the teams were,” Yakovenko recalled.
A group of Solana experts and a number of investors subsequently reached out to hundreds of projects building on the blockchain to assess the collateral damage.
According to Yakovenko, roughly 20% of startups in the ecosystem had received funding from FTX or Alameda Research. Only 5% of them kept assets on the bankrupt exchange.
“That is what hurt the most. Teams watched as their development funds evaporated,” said the head of Solana.
He also expressed sympathy for projects that trusted FTX as custodian. For many of them it was a “catastrophic failure”.
One notable example was the infrastructure startup Coral Armani Ferrante. The founder — a former Alameda engineer — estimated losses of $14.5 million of the $20 million raised previously.
“People like Armani simply redoubled their efforts and rebuilt their companies. They embraced the setback and used it as energy for creation,” Yakovenko said.
While he acknowledged that the SOL crash, driven by the ties of many projects to FTX, was a “hard pill to swallow”, it pales in comparison with the losses inflicted on the ecosystem.
“It was painful. The token’s fall is nothing. After all, it’s cryptocurrency, it moves up and down all the time. But the funds raised by people evaporated, which is really painful. I’m just glad that most teams endured,” Yakovenko emphasised.
According to him, the consequences of the FTX collapse for blockchain also had a positive side. For some influential venture investors, close ties with the Bankman-Fried exchange had been an obstacle to supporting Solana. As an example, Yakovenko cited Placeholder partner Chris Burniske.
2/ @VitalikButerin recently asked me what I like about @Solana and so I’ll share with the public an adapted & threaded-version of what I wrote to him ?
— Chris Burniske (@cburniske) December 30, 2022
“In essence, he said that now is the time to look at Solana, because an important entity that really harmed decentralisation has disappeared. Here, legitimate people are building. His opinion had a big impact on the ecosystem and set everyone on their feet,” Yakovenko said.
On November 2, a jury found Bankman-Fried guilty on all seven counts. ForkLog reported on this in an extended News+ format.