Solana Tokens Continue Steep Slide
CoinDesk reports Solana Tokens Continue Steep Slide While Major Cryptos Stay Flat
Crypto markets slid a nominal 0.8% in the past 24 hours as broader equity markets grappled with renewed coronavirus fears stemming from China. Solana (SOL), however, dropped as much as 10% in the past 24 hours, adding to a 20% slide over the past week. Thursday’s decline put SOL on track for nine straight days of losses, the longest run of declines since Sept. 17, 2021, based on Messari data.
Since 2020, Bankman-Fried has been a major proponent of the Solana network, launching the decentralized exchange Serum on the then-upstart network and investing heavily in the platform’s projects.
Apart from prices, the value locked on Solana-based applications has declined 98% since November last year, DefiLlama data shows. Steep falls in Solana’s metrics came after the implosion of Terra network in May and a market-wide drop in July and after Bankman-Fried’s FTX problems first came to light early last month.
$50 Billion Crypto Wipeout
CNBC reports Solana’s Slide Accelerates — $50 Billion in Value Wiped Out in 2022
Among Solana’s biggest problems in late 2022 was its close relationship to FTX founder Sam Bankman-Fried, who faces eight criminal fraud charges after his crypto exchange went bankrupt last month. The disgraced former crypto billionaire was one of Solana’s most public boosters, touting the advantages of the blockchain technology and investing over a half-billion dollars in Solana tokens.
Bankman-Fried’s companies held nearly $1.2 billion worth of the token and associated assets in June, according to documents reviewed by CoinDesk.
In the last week, Solana has declined over 30%. Ether has held steady, shedding 1.7% in the same time period, while bitcoin has only dropped 1.2%. Among the 20 most-valuable cryptocurrencies tracked by CoinMarketCap, the next biggest loser over that stretch is Dogecoin, which has fallen 9%.
Bitcoin uses a proof-of-work mechanism. Ethereum and rival Solana use proof-of-stake. Rather than relying on energy-intensive mining, proof-of-stake systems ask big users to offer up collateral, or stake, to become “validators.” Instead of solving for a cryptographic hash, as with bitcoin, proof-of-work validators verify transaction activity and maintain the blockchain’s “books,” in exchange for a proportional cut of transaction fees.
Solana’s supposed differentiating factor was augmenting proof-of-stake with proof-of-history — the ability to prove that a transaction happened at a particular moment.
Proof of History, Proof of Work, Proof of Stake
Proof of work and proof of stake use algorithms to validate cryptocurrency on a blockchain network. The main difference is how they choose and qualify users to add transactions.
TechTarget has a nice explainer article Proof of work vs. proof of stake: What’s the difference?
Bitcoin operates on a proof of work concept which is very energy intensive.
SOL claims to offer Proof of History on top of Proof of Stake. OK, so what? How does anything but hype explain the meteoric rise from $1 to $259.
SOL Delisting
https://twitter.com/TheCryptoRss/status/1608848509180022787
How Many Cryptos Are There?
CoinMarketCap says there are approximately 21,910 cryptocurrencies as of Dec 7, 2022.
What a hoot!
Each of those cryptocurrencies claims to do something better, cheaper, or more efficient.
Many cryptos promise preposterous returns on staked coins, paid of course in crypos not US dollars. You make 50% or whatever paid in worthless tokens so you lose it all.
DogeCoin was started as a joke. Of the 21,910 cryptos, they are nearly all a joke.
Some would suggest every one of them is a joke. Others say they are all a joke except Bitcoin and Ethereum.
Finally, Bitcoin “maxis” believe they are all worthless except Bitcoin.
At any given moment, they are all worth what they are worth provided you can cash out. With staked coins you are stuck.
SOL is down 96% but it can fall 50% or 100% from here. Given delisting announcements, why shouldn’t it fall to zero?
Dear Lord, Send Help
Overall, with liquidity shrinking, Fed hiking, and a clear shift in sentiment, the $1,000,000 price tag people put on Bitcoin seems more preposterous than ever.
Cathie Wood has has that target for Bitcoin as discussed in Dear Lord Send Help, the Ark is Sinking and Tesla With It.
This post originated on MishTalk.Com.
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