Solana Foundation Shares Update on Epoch 370 as New US CPI Print Saves SOL From Sinking
Solana’s native token has been dealt a collateral blow from FTX turmoil turning its market sour on Thursday. Market data shows that Solana has been expunged from the top 10 cryptocurrencies by the market capital after dumping heavily in the gone 48 hours. The price of Solana (SOL) was staring at a second consecutive close below $14, having lost as much as 45% of its value on Wednesday. It has, however, traced a mild bounce on account of the latest US Consumer Price Index (CPI) report delivering better results.
Hype around the recent flurry of optimistic news melts
The SOL token enjoyed an uptrend towards the end of last week before eventually wrapping up the week in an upbeat tone materialized by welcome announcements at the Breakpoint conference. Reassuring remarks from crypto executives attending the event, including Solana Labs CEO Anatoly Yakovenko, inspired a modest climb to an eleven-week high of $38.50 on Saturday.
SOL/USD 3-month trading chart
At the annual event, which ran simultaneously across four venues between Nov. 4 and 7, Solana Labs executives shed light on the future of the network. Here is a breakdown of the event and updates on various products and innovations coming to the ecosystem.
Eliminating the lingo barrier
The crypto space keeps evolving, but one challenge yet to be fully solved is onboarding the mainstream audience. Speaking at the event in Lisbon, Head of Communications at Solana Foundation Austin Federa determined that current adoption rates mirror those of the internet in the mid-1990s. A particular concern Federa noted is hampering adoption is linguistic gatekeeping. The Head of Communications also brought to the fore the changes witnessed across the ecosystem, particularly in Web3 gaming, i.e., solely financially-focused games slowly coming to an end. Developers are now creating games meant for fun rather than those entirely motivated by incentivization.
Aiming for the moon
When he took to the stage, a sanguine Yakovenko spoke on the future of Web3 and Solana’s place in it. The Solana co-founder explored how differently Web3 handles content compared to Web2 platforms, which do not really reward users with true digital ownership. He also acknowledged that Web2 has an advantage with its low latencies. To compete decently, Solana intends to cut its latencies between users and networks to as low as 50 ms, a meager challenge that will not take much.
Solving the blockchain trilemma
Yakovenko was not shy to admit that Solana, just like any other network, is struggling to strike a perfect balance in regard to the blockchain trilemma. The goal for all chains is to achieve optimal levels in all of decentralization, security, and scalability. The executive believes that the solution (for Solana) lies in relying on better hardware. The developer further noted developments in the open-source Linux operating system that could potentially benefit blockchains, which is important as Solana has always targeted being as composable as Linux.
He reiterated that Solana’s growth has been entirely transparent, adding that the chain’s ability to support multiple events without crashing gives it an edge over competitors. Yakovenko envisions a future in which Solana has up to 200,000 light clients, a growth which he expects to boost validator numbers to levels that support mass adoption.
Helium Mobile aims at an integrated user experience for the Saga phones
Yakovenko revealed more details about the Solana Saga phone coming next year, telling attendees it would offer an Apple Pay-like experience. Also at the event, decentralized wireless carrier Helium network and Solana Labs announced that the crypto-powered wireless network would power the Saga phone once it launches.
The partnership is expected to strengthen ties between the two, though the Saga phone won’t be exclusive to Helium. US-based owners who choose Helium Mobile will enjoy a 30-day trial with unlimited voice and text use. These will come alongside a smooth and integrated user experience and maybe receive cryptocurrency incentives for utilizing the mobile service.
USDC integrates Euro Coin support for Solana
Circle, the firm behind leading stablecoin USDC, announced during the event that it would be including support for Solana in its upcoming Euro Coin (EURC). The stablecoin issuer’s director of engineering Marcus Boorstin said that in addition to Solana DeFi protocols Radium and Solend, crypto exchange FTX has also committed to supporting EURC deposits and withdrawals on Solana.
Boorstin said that alongside support for the EURC token, developers now have access to its cross-chain infrastructure coming next year. EURC is more or less a USDC equivalent also running on Ethereum but backed by the Euro. The Cross-Chain Transfer Protocol interoperability tool enhances developer experience by allowing sending and receiving of USDC natively across blockchains. The Cross-Chain Transfer Protocol will initially launch on Avalanche and Ethereum before debuting on Solana within the first half of next year.
The sigh of relief barely lasted
Crypto.com communicated yesterday that it had suspended deposits and withdrawals of USDC and USDT stables on the Solana chain. In reaction to this and other concerning developments unfolding around FTX, FTX Ventures, and Alameda, market participants have beat a hasty retreat to the sidelines. Solana (SOL) has given up its weekend gains in the last three days as losses solidify end to end. Wednesday saw the coin plunge to a 21-month and intraday low of $12.50.
SOL/USD 5-day trading chart
There are signs of mild positive action to counter the hemorrhage giving bold traders a chance to jump back, but more losses could still be on the cards. The SOL token lost grip of the $19.50 mark, which held as a crucial bounce level in June and July 2021.
“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, which at roughly around 8:30 AM UTC on Thursday, Nov. 10,” Chinese crypto market reporter Collin Wu observed, referring to the end of the token lock-in period happening today.
In a Nov. 1o update, the Solana Foundation said the staking has been put off until a later date.
“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.”
The event could have exacerbated the situation for the once dubbed ‘Ethereum-killer’ as expectations of a dump by validators looking for an exit were high.
Solana (SOL) is no longer among the top 10 in market capital rankings
Solana is trading more than 90% below its all-time high. Coinglass data shows that more than $53 million of SOL futures positions have been liquidated over the past 24 hours. Blown-out long orders make up the bulk of this wipeout but in the 4-hour timeframe, short orders are the majority. Funding rates sunk as low as -5.5% today as the market braced for the now-shelved unlock. In market rankings, Solana has fallen to 12th at the time of writing, with a growing market capital of $6.2 billion. The project trails Polygon which has an equivalent figures last observed at $9.9 billion.
Funding rate history
Solana’s NFT ecosystem retained October’s momentum at the start of the month thanks to returning NFT buyers, adding to the positive theme around the native token over the weekend. Towards the end of last week, Meta announced support for Solana-based non-fungible tokens (NFTs) on its Instagram platform. On Sunday, Metaplex CEO Stephen Hess announced that NFT creations from renowned digital artist Mike’Beeple’ Winkelmann would be coming to the Solana blockchain.
The news excited Solana users, albeit briefly, as a Monday update from Hess clarified there was a miscommunication and that no concrete developments have been made in that regard. The Solana DeFi niche has also been rattled, seeing equal losses during the same period. The total value locked on all Solana protocols has fallen sharply from around $1 billion on Monday to barely $450 million at writing according to data from DeFi Llama. The current figure is only a fraction of its peak TVL of 10.17 billion observed exactly one year ago.
Calls to remain calm
Executives of protocols native to Solana and other influential crypto figures associated with the blockchain have increased social activity to counter the fading enthusiasm as they attempt to bring users behind its market.
“Just an observation: Solana ecosystem builders and founder community has a disproportionately large concentration of endurance athletes.” Raj, one of the co-founders, posted.
Jump Crypto President voiced his support for Solana in a Nov. 9 tweet highlighting some of the ‘cool things’ building on the network. Meanwhile, Antony Yakovenko has called upon the Solana community to hang on as “chewing glass” is part of the project’s ‘DNA.’
To learn more, visit our Investing in Solana guide.
