Solana Ecosystem Facts Related To FTX Bankruptcy

Last updated: Nov. 21, 2022

Solana Ecosystem Facts Related To FTX Bankruptcy

Last updated: Nov. 21, 2022

This page is meant to provide real time information and updates in the wake of recent events surrounding the commencement of Chapter 11 voluntary bankruptcy proceedings of FTX Trading Ltd., Alameda Research Ltd., and affiliated entities (“FTX/Alameda”).  Our main focus remains supporting builders and users who were affected. We will continue to update this with additional information as needed.

The Solana network

Solana Foundation balance sheet exposure to FTX/Alameda

  • Solana Foundation had ~$1M in cash or cash equivalents on FTX.com as of 11/6/22 when FTX.com ceased to process withdrawals. This is less than 1% of Solana Foundation’s cash or cash equivalents and as such, the impact on Solana Foundation operations is negligible.
  • The Solana Foundation had no SOL custodied on FTX.com

Solana Foundation asset exposure to FTX/Alameda

As of 11/14/22, the Solana Foundation has exposure to the below assets in connection with the transactions with FTX/Alameda specified below. These assets were held on FTX.com accounts (and continue to be held there) as of 11/6/22 when FTX.com ceased to process withdrawals.

  • ~3.24m shares of FTX Trading LTD common stock
  • ~3.43m FTT tokens
  • ~134.54m SRM tokens

While we do not have visibility into FTX/Alameda’s current balance sheets, we can confirm the below transactions.

Solana Foundation transactions with FTX/Alameda

FTX/Alameda first purchased SOL from Solana Foundation in August of 2020, six months after Mainnet Beta launched. Below is a summary of Solana Foundation’s SOL sales to FTX/Alameda.

Entity

Counterparty

Effective Date

# of SOL 

Unlock Schedule

Solana Foundation

Alameda Research Ltd

August 31, 2020

◎4,000,000

N/A

Solana Foundation

Alameda Research Ltd

September 11, 2020

◎12,000,000

Linear monthly unlock from September 2021 to September 2027

Solana Foundation

Alameda Research Ltd and FTX Trading Ltd.

January 7, 2021

◎34,524,833

Linear monthly unlock from  January 2022 to  January 2028 



Solana Labs, Inc.’s transactions with FTX/Alameda

Below is a summary of Solana Labs, Inc.’s SOL sales to FTX/Alameda.

Entity

Counterparty

Effective Date

# of SOL 

Unlock Schedule

Solana Labs, Inc.

Alameda Research Ventures Ltd.

February 17, 2021

◎7,500,000

Full balance unlocks on March 1, 2025

Solana Labs, Inc.

Alameda Research Ventures Ltd.

May 17, 2021

◎61,853*

Full balance unlocks on May 17, 2025


*not yet settled

In light of the voluntary Chapter 11 bankruptcy proceedings that FTX/Alameda announced on November 11, we do not know how these and other FTX/Alameda’s assets will be settled in the aftermath of the Chapter 11 proceedings.

Locked Tokens on Solana

  • Locked tokens are deposited into locked stake accounts and they cannot be transferred on-chain until the lock has expired. Locked tokens can be staked, and broken into smaller stake accounts, but the tokens within stake accounts cannot be transferred on-chain until the lock has expired.

Wrapped assets on Solana affected by Sollet custodial bridge

  • The total exposure to Sollet-based assets on Solana in circulation is valued at approximately $40 million as of Nov 10, 2022. The status of the underlying assets is unknown at this time.
  • USDC and USDT on Solana are not wrapped assets, but are minted as native SPL tokens by Circle and Tether, respectively.

Status of Serum, an order book DeFi project built on Solana

  • The Serum community organized and deployed a new verified build of Serum with a new program ID. Additional efforts by the community are ongoing but a recent update was provided here. We are closely following developments.

Status of the DeFi ecosystem on Solana

  • Most of the largest DeFi projects on Solana had limited or no exposure to FTX, based on a recent assessment by Solana Foundation. There are certainly projects with exposure to FTX and those projects seem to be actively working to figure out a way forward, but the outcomes there are not yet known. The DeFi environment in 2022 has been challenging but the ecosystem continues to evolve and innovate.

The current state of liquidity support / market making on Solana

  • There are multiple market makers providing liquidity for DeFi applications on Solana.

Unstaking of SOL as of Epoch 370 on Thursday, November 10

  • Token holders can stake or unstake SOL to a validator at every epoch boundary, which occurs roughly every two to three days.
  • The current epoch is Epoch 370 and is slated to end roughly around 8:30 AM UTC on Thursday, Nov. 10.
  • Currently 29 million SOL from ~250 accounts is slated to be unstaked at the end of Epoch 370. This accounts for ~5.4% of total supply.
  • The network has handled similar levels of destaking before: Epoch 140 saw over 44 million SOL unstaked and Epoch 72 saw over 30 million SOL unstaked.
  • A total of 63 million SOL was previously slated to be unstaked at the conclusion of Epoch 370. This amount included 28.5 million SOL scheduled to be unstaked by the Solana Foundation related to a change in a data center provider’s terms of service.  The unstaking action of 28.5 million SOL by the Solana Foundation Delegation Program has been postponed, and will be effectuated in the near future (see more information here).
  • All tokens in the Solana Foundation Delegation Program are owned by the Solana Foundation as part of its treasury. No entity on Solana has the ability to stake or unstake tokens it does not control the keys for.

Update History:

Nov. 21: Added Solana Foundation asset information and clarification about USDC and USDT on Solana.
Nov 15: Added Update History section
Nov 14: Added Solana Foundation’s and Solana Labs’ historical transactions with FTX/Alameda, definition of locked tokens
Nov 13: Added Solana Foundation exposure to FTT, SRM, and FTX Trading Ltd. equity
Nov 11: Added information on wrapped assets
Nov 10: Added information on how key control works for unstaking
Nov 9: Initial publication of epoch boundary unstake information