Solana CEO Expresses Concern for Ecosystem Startups Following FTX Collapse

The collapse of FTX in 2022 had a significant impact on the cryptocurrency space, particularly on the Solana ecosystem. In an exclusive interview with Cointelegraph at the Solana Breakpoint conference in Amsterdam, Solana CEO Anatoly Yakovenko expressed his concern for the startups that were building on the layer 1 smart contract blockchain protocol.

Worries About Exposed Teams

Yakovenko explained that he was more worried about the ecosystem of startups and how exposed they were to the collapse of FTX. In the immediate aftermath of the bankruptcy, Solana's native token SOL saw a significant drop in value, trading at $36 before dropping to as low as $12.

Reaching Out to Affected Projects

Solana's brains trust and several investors contacted the teams building on the Solana protocol to assess the damage caused by the collapse. According to Yakovenko, approximately 20% of Solana-based projects had received investments from FTX or Alameda Research, and just 5% of ecosystem startups had funds on the defunct exchange.

Collateral Damage to Startups

The CEO empathized with founders who had trusted FTX as the custodian of their funds. He noted that the failure of the exchange was catastrophic for those companies, as it caused their runway to evaporate. One such example was Armani Ferrante, who lost around $14.5 million that his company, Coral, had held on FTX.

Resilience and Rebuilding

Despite the challenges faced by the ecosystem, Yakovenko commended the resilience of the affected teams. Many founders, like Ferrante, doubled down and rebuilt their companies, channeling the failure as energy to move forward. The CEO expressed relief that the majority of teams survived the fallout.

Silver Lining for Solana

As the one-year anniversary of the FTX collapse approaches, Yakovenko sees a silver lining for the Solana ecosystem. He mentioned that several investors have reached out, stating that the influence of FTX had been an impediment to supporting the new generation smart contract layer-1. Chris Burniske, an Ethereum venture capital investor, played a significant role in articulating the value proposition of Solana and helping the ecosystem recover.