31M+ SOL to be Unstaked Today: Will SOL Collapse?
Solana validators have decided to unlock more than 31M SOL tokens today. This is an approx 5.4% of the total SOL supply.
Apart from this, Sam Bankman Fried’s company Alameda Research holds more than one billion dollars worth of $SOL (Solana’s native token) which soon may be sold for liquidity.
What we are going to learn?
Why did SOL drop more than 50% in last few days?
When earlier this week worries started building up regarding Alameda and its finances, market analysts began to assume that Alameda would have to sell a number of its SOL tokens to raise liquidity. This speculation caused a massive drop in SOL prices.
The drop was further accelerated when Binance initially said it would go on to buy FTX and the next day reports showed that Binance might be inclined towards not completing the deal.
How many SOL tokens will be unlocked today?
Solana validators who are responsible for providing security to the platform’s blockchain are ready to unlock $468 million worth of SOL token as “Epoch 370” approaches.
Epoch 370 is the termination of the lock-in period of the token. The price of the Solana token has plunged down to $15.02 which is a drop of 25.86%.
In the past, SOL ecosystem saw similar unlocking twice – over 44M SOL tokens were unlocked at Epoch 140, and close to 3oM Sol tokens at Epoch 72.
More than 63M SOL tokens were earlier stated to be unlocked, including 28.5M SOL tokens from Solana foundation Delegation programme, which is now postponed to a later date.
On 11/2, Hetzner removed many of Solana’s independent validators in connection with a change of Hetzner’s policy. As a result, the Solana Foundation began the process of unstaking 28.5M SOL delegated to those validators as part of the Solana Foundation’s Delegation Program…
— Solana Foundation (@SolanaFndn) November 9, 2022
When will the SOL tokens unlock?
$468M million worth of Solana tokens amount to 31 million SOL and are scheduled to unlock on Nov. 10, 2022, at 8:30 a.m. UTC.
Are there any other issues with Solana?
One of the other major issues in front of Solana is the wrapped Sollet tokens i.e. soBTC which is very commonly used across lending and AMM platforms. The problem is that these particular tokens are in fact issued by Sam Bankman’s FTX (or Alameda, no one really knows).
Other tokens that were a part of Alameda’s holding include the MAPS and OXY tokens. MAPS value has reduced by 8.7% to $0.102580 and OXY is at $0.02611709 which is a drop of 30.5%.
This unlock can take Solana’s prices to an alarming low. It could also have ripple effects on the entire crypto market as a whole, which wasn’t looking very great anyway, and the unlock could possibly worsen the situation.
Is SOL going to zero?
If those whose SOL tokens are getting unlocked, decides to sell, there may not be enough liquidity in the market to handle the selling pressure, given the negative sentiments around FTT and other SAM tokens.
Solana may not go to zero, but could drop more than 50% in value. Solana could be expected to trade below 10USD.
As a SOL Holder, what should you do?
Many crypto analysts have suggested exiting from the token trade as soon as possible. By doing this you might not be winning the trade but it will keep you from losing any more money.
The whole market has been impacted and the entire crypto space is lacking overall Passion and integrity. The key takeaway from this entire fiasco is that you must choose your projects wisely and you can still find a hidden gem.
Your research must be very well done and you must keep up with all new developments happening in the market constantly.
Learn more about what happened with FTX FTX and Binance situation explained. Should you worry?