Following FTX’s collapse, decentralized finance (DeFi) projects on Solana blockchain rushed to cut ties with Serum. But this seemingly turned off the switch on Solana DeFi. Highly regarded as Ethereum killer, Solana is now struggling to survive.
Its total value locked (TVL) plunged almost 70% since November 7 to $303 million. The network’s native token SOL lost a quarter of its value. At the time of writing this article, SOL was down by 1.04% and trading at $13.48.
Initially, Solana stated that the network did not experience any notable performance or uptime issues. But the Solana Foundation had $1 million in cash or cash equivalents on FTX.com, as per information on its portal, as of June 11, 2022, when the crypto exchange ceased to process withdrawals. The said amount is less than 1% of Solana Foundation’s cash. As such, Solana Foundation assured users that this was negligible – it had no SOL custodied on FTX.
Solana’s developers, stakeholders, and investors are working hard to get the network on its feet again. Anatoly Yakovenko, Solana co-founder, said the community’s evolution of Serum to OpenBook has been great. He pointed out that the community mobilized quickly and in the open to redeploy Serum so it continues on a new, secure path, with decisions made by and for the community members. Yakovenko touted OpenBook as a great demonstration of decentralization in action.
Mango Max, a pseudonymous developer, highlighted that the Serum program update key was not controlled by the SRM DAO. In fact, it was controlled by a private key connected to FTX. He said no one can confirm who controls the key. Then came the news that Serum’s private key was compromised. As such Solana took a hit.