Solana’s Total Value Locked has shrunk in the backdrop of FTX contagion. TVL is a metric that highlights the total coins deposited across DeFi protocols, including staking, lending, and liquidity pools.
Data from DeFiLlama showed that SOL’s TVL tanked over 33% at the time of writing, to $417 million, a significant decline from the previous peak of $10 billion reached on November 9, 2021.
Of all the SOL’s protocols, DeFi platform Solend has lost nearly its entire worth. Its current TVL stands at $44.83 million, down by over 60% in the last 24 hours. Similarly, Radium and Lido’s TVL have too fallen by 35% and 47% over the day and are currently hovering at $62 million and $49 million respectively.
The largest among them, Liquid staking protocol Marinade Finance, too witnessed its TVL on the chain, fall to 37% to rest at $107 million in the past 24 hours.
The other day Solana’s native SOL coin lose its value in the early hours of 9 Nov, leaving lending firm Solend to close out a sizable account that went underwater. SOL’s price depreciated by 65% in less than a week and is trading at $14 at press time.
At first, Solend attributed the failure to liquidate to network slack. Later investigation revealed that the problem was a lack of on-chain SOL liquidity, which the protocol has attempted to address by raising the interest rate on SOL to over 2,500% in an effort to attract deposits and motivate borrowers to repay their loans.
Panic Among Solana Investors Amidst FTX FUD
As investors hurried to sell their stakes, more than $800 million worth of SOL is expected to be unstaked early on Wednesday, data from solanacompass.com revealed.
SOL started to decline shortly after Binance CEO Changpeng Zhao declared that the largest cryptocurrency exchange in the world would sell $500 million in FTT, a token created by a rival FTX, as a result of recent “revelations,”
FTT holders rushed to exit their positions by selling the token aggressively out of concern that the Binance sale would cause its price to soar, leading to the exact freefall they had anticipated.
As Solana began its descent, leading on-chain experts speculated that FTX and Alameda were liquidating their SOL holdings to raise cash to support FTT.
The CoinDesk article stated that as of June 30, Alameda held around $1 billion in SOL. 10% of Solana’s market capitalization at the time was represented by it.