Stephen Hess, Co-founder and Chief Executive Officer (CEO) of the Solana NFT protocol Metaplex, has announced that it is laying off several individuals in the wake of FTX’s collapse.
Hess added that Metaplex, the base layer of the Solana NFT ecosystem, is required to let go of its employees, even though its treasury isn’t directly impacted by the collapse of FTX. Worth pointing out, however, that the number of discontinued employees hasn’t been specified.
Can Metaplex survive the second crypto-crash?
Metaplex is the protocol that powers NFTs on Solana, which has taken root as an alternative NFT network to dominant Ethereum. In January 2022, the Metaplex Foundation raised $46 million, funded by the likes of Multicoin Capital, Jump Crypto, and NBA legend Michael Jordan.
The collapse of the Terra stablecoin system in May 2022 led to a market crash with very long-term repercussions. During the bear market following this debacle, Metaplex launched its native governance token, MPLX, in September 2022. The token has since continued to fall below its opening price of $0.88, with the same trading at 0.056 at press time.
On 10 November, the Solana Foundation revealed that it had around $1 million in assets on FTX before the company paused processing customer withdrawals. These assets are now trapped on the platform, awaiting the outcome of FTX’s bankruptcy proceedings. The funds amount to less than 1% of its funds.
In addition, the Solana Foundation owns around 3.24 million shares of FTX Trading LTD common stock, 3.43 million FTT tokens, and 134.54 million SRM tokens from Project Serum. As of 7 November, its FTT and SRM tokens were worth $75.5 million and $101 million, respectively.
Sam Bankman-Fried “SBF” founded Project Serum, the Solana-based DEX in 2020.
SOL falls by 60%
As the NFT industry is facing the consequences of debates over creator royalties, NFT sales on the Solana ecosystem have continued to fall over time.
Solana was one of the favorite networks of FTX founder SBF. Once FTX collapsed, the price of Solana’s native token SOL dropped by over 60% on the charts, falling from $32.74 on 7 November to $13.55 at press time. In fact, the said depreciation was 3x the percentage fall registered by the likes of BTC and ETH.