$SOL: Citi Says Solana’s Transaction Activity Is at Pre FTX Collapse Levels

Citi (C), in a research study published on Thursday (12 January 2023), stated that despite the fact that an estimated 50 million Solana (SOL) coins are stuck in the Chapter 11 proceedings of cryptocurrency exchange FTX, there is still a significant amount of activity on the Solana blockchain.

Here is how Coinbase described Solana in a blog post published on 29 June 2022:

Solana is a decentralized computing platform that uses SOL to pay for transactions. Solana aims to improve blockchain scalability by using a combination of proof of stake consensus and so-called proof of history. As a result, Solana claims to be able to support 50,000 transactions per second without sacrificing decentralization, and is one of the largest proof of stake blockchains by market cap.

Solana aims to enable smart contracts to allow developers to build a wide range of decentralized finance (DeFi) apps, new crypto tokens, games, and more. When users stake their crypto, they make the underlying blockchain of that asset more secure and more efficient. And in exchange, they are rewarded with additional assets from the network, which are paid out as rewards.

According to CoinDesk’s report about Citi’s research note, this has significantly decreased the amount of the cryptocurrency that is now in circulation and has exacerbated the level of uncertainty over the future of blockchain technology.

Analysts led by Joseph Ayoub stated:

However, numerous critical measures like as active addresses and daily non-fungible-token (NFT) traffic have recovered to pre-FTX-collapse levels.This might potentially indicate comfort from some users on the chain.

Citi says developers have continued to be active on the blockchain, as seen by the recent airdrop of the new project Bonk Inu ($BONK) to holders of Solana.

Here is Bybit explaining the $BONK token:

Bonk is the first Solana dog coin that specifically supports this community and focuses on lifting the platform from a low point in its history. Bonk’s developers identified challenges that Solana faced well before the recent FTX debacle that sent SOL prices tumbling. This public blockchain platform had consistently been one of the higher-rated platforms, but recently, it has been impacted by nefarious players who have largely been interested in profiting from the platform rather than growing it. 

Bonk is a meme token that launched on Solana in December 2022 with an airdrop of approximately half of its token supply. Many of these tokens found their way into the crypto wallets of top NFT developers, investors and other key players. While this airdrop had an immediate and positive impact on the Solana price, the longer-term impact of Bonk’s debut on the Solana community is also promising.”

Citi’s note pointed out that Solana’s largest NFT collection, DeGods, had just departed the network, citing uncertainties about its future. Citi also mentioned that Solana’s primary task is to encourage users and developers to remain loyal to the platform.

On Monday (9 January 2023), with $SOL up 21% on the day, Mike Dudas, Founder and General Partner at NYC-based venture capital firm 6th Man Ventures (“6MV”), said that Solana’s technology, products, and community are “too strong” for $SOL to fall to $0 (which is what some doomsayers expect to happen).

Dudas, who is also currently Vice President and Head of Stablecoin Business Development at fiat-backed stablecoin issuer Paxos, told his over 129K Twitter followers in a now-deleted tweet:

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