Solana Leads Crypto Slump With FTX’s Serum Project In Distress

A four-day slump for crypto altcoin Solana deepened, while developers spun off one of the blockchain network’s most prominent and FTX-affiliated projects. 

Solana fell as much as 11% to $12.11 on Monday in Asia’s morning. Crypto bellwethers Bitcoin and Ether also slumped, with Bitcoin at one point dropping below $16,000. Other altcoins, including Polkadot and Avalanche, typically more volatile than larger cryptocurrencies due to lower liquidity levels, fell as well. 

The crypto market has lost about $200 billion in value in the past week itself, as the collapse of FTX CEO Sam Bankman-Fried’s crypto empire took its toll on investor confidence in digital assets. The hypothetical market value of the crypto universe has shrunk to about $810 billion from around $3 trillion about a year ago, according to data from CoinMarketCap.

Dogecoin declined as much as 5.6%, losing much of the gains from earlier in the weekend after Tesla CEO Elon Musk touted the token on Twitter.

Tokens issued by Serum, a liquidity infrastructure hub built by FTX and used by market makers and lending protocols on Solana, tumbled more than 23% on Sunday alone, pricing data from CoinGecko showed. FTX owned more than $2.2 billion worth of the token as of Thursday, the Financial Times reported, citing investor materials.

Developers attached to Serum split off the project’s code in a so-called fork amid concern that an upgrade key controlling the program could be compromised, a Solana spokesperson said. 

While moving some of its assets to offline wallets after filing for bankruptcy on Friday, FTX said it experienced a series of unauthorized withdrawals. Analysts estimated more than $475 million in tokens were stolen in the process.