Solana’s native token, SOL, has experienced a tremendous surge in value recently, surpassing XRP and briefly overtaking Binance Coin (BNB) to become the fifth-largest cryptocurrency. In the past month alone, SOL has surged by nearly 23%. This surge in value can be attributed to several factors, including the excitement surrounding airdrops, the complete sell-out of Solana’s Saga phone, and its trading at a premium on secondary markets.
Recent data has raised concerns about the large holdings of SOL by FTX and Alameda, two prominent crypto firms. These holdings have reportedly surpassed even the holdings of Bitcoin and Ether. This has raised concerns because Solana had distanced itself from the fallout of Sam Bankman-Fried’s (founder of FTX) empire after experiencing a significant loss in value. It is worrisome to see such a large investment in SOL by two entities that were previously associated with a failing project.
Only 27% of FTX’s total Solana holdings have been unlocked, amounting to 15.3 million SOL. There are speculations that 13.22 million SOL, equivalent to $666 million, may have already been sold. Spot On Chain’s analysis reveals that FTX and Alameda have moved 6.99 million SOL, worth $280 million, from public SOL addresses to exchanges. Additionally, another FTX-associated address unstaked and transferred 6.23 million SOL, valued at around $386 million, to a Coinbase wallet. These movements suggest that there might be 2.08 million SOL ($206 million) remaining for immediate trading.
The remaining 73% of FTX’s total SOL holdings, which comprises 40.5 million tokens valued at $3.99 billion, are still under lockup. They will be released slowly according to a vesting schedule. Approximately 609,000 SOL ($60 million) will be unlocked each month, constituting around 1% of FTX’s total SOL holdings. On March 1, 2025, a substantial amount of 7.5 million SOL will be unlocked, representing 13.5% of FTX’s total holdings. This will be followed by an additional 61,800 SOL, which will be unlocked on May 17, 2025.
Since FTX’s bankruptcy in November, SOL has seen an astonishing increase of over 460%, reaching its current value of $94 from $17.66. It is predicted that FTX debtors could potentially gain an additional $3 billion or more from their SOL holdings. However, considering the vesting schedule, it is unlikely that any substantial impact on the market will result from FTX and Alameda’s potential SOL sell-off in the near future.
Solana has experienced significant growth in terms of total value locked (TVL) on its network. The TVL has surged by over 516% since the beginning of the year, from $210 million to $1.295 billion as of December 22. Transaction volume on decentralized exchanges (DEXs) operating on the Solana blockchain has also surpassed that of Ethereum. In the past week, DEX volume on Solana reached $10.12 billion, surpassing the $8.82 billion worth of transactions on Ethereum’s DEXs. This achievement is noteworthy as Ethereum has historically dominated DEX trading.
The surge in DEX activity on Solana can be attributed, in large part, to its lower gas fees compared to Ethereum. This has attracted more traders and users to the platform, contributing to its overall growth. Additionally, the Solana-based memecoin BONK has gained significant traction in the crypto community, maintaining a billion-dollar market capitalization for weeks after a rapid rise.
Solana’s SOL token has seen a tremendous surge in value, making it one of the top cryptocurrencies in terms of market capitalization. While concerns surround FTX and Alameda’s large holdings and potential sell-off, the impact on the market is likely to be limited in the near future due to the vesting schedule. Solana’s growing popularity, lower fees, and the success of memecoins like BONK contribute to its overall success and adoption within the crypto community.
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