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The recent failure of Binance and FTX transactions sent ripples through the cryptocurrency market. The entire cryptocurrency market has been a witness to a volatile market since the beginning of the year.
The collapse of FTX and Alameda research sent the market into a frenzy. Some investors have apparently demanded the reclamation of the tokens they “stake” or deposited into the blockchain’s underlying security protocol.
Earlier this week, the situation at Alameda Research and FTX led crypto market analysts to believe that FTX would sell large amounts of SOL tokens to boost liquidity amid FTX’s liquidity crunch. Fear caused SOL prices to plummet.
However, the dynamics have changed as Solana validators who provide security to the blockchain will unlock “Epoch 370,” or nearly $800 million worth of SOL holdings, in less than 10 hours.
On the Solana blockchain, the time period during which staking rewards are earned and issued is called an “epoch”. When a validator locks a stake on the blockchain, the process takes about two days. Validators have the right to unlock the pledge after that period ends.
As the FTX saga continues, cryptocurrency exchange Crypto.com has temporarily suspended the circulation of two of the top SOL ecosystem stablecoins.
The cryptocurrency exchange cited recent industry events in an email to users to stem the movement of the coin. “The suspension of deposits and withdrawals of USDC and USDT on the Crypto.com app and the exchange’s Solana blockchain is effective immediately,” the email said.
The email also said deposits in other stablecoins, including Ethereum and Cronos, would not be affected.
Solana is considered an active competitor to Ethereum and is a smart contract platform that offers low fees and high speed. Solana also hosts a range of DeFi applications. However, a significant portion of its total supply is controlled by Sam Bankman-Fried’s FTX and Alameda Research trading firm, which has kept Solana in the doldrums in the cryptocurrency market as of Wednesday.
The SOL token plummeted by around 42% due to the implosion of FTX. The current price is about 92% lower than where it was trading a year ago.
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