Image default
Crypto

Solana’s SOL Surges After Blockchain’s Foundation Delays Plan to Unstake Tokens

Facebook iconLinkedin iconTwitter iconSolana

(Danny Nelson/CoinDesk)

Facebook iconLinkedin iconTwitter icon

A record 31 million of the Solana blockhain’s SOL tokens were unstaked Thursday from the blockchain’s security mechanism, a day after crypto analysts warned that some investors might be seeking to redeem their holdings as the price of the digital assets tanked.

But the price of SOL surged in digital-asset markets after the Solana Foundation, which supports development on the blockchain, said it would postpone a plan to unstake some 28.5 million tokens.

A total of 63 million SOL was previously ready to be unstaked at the conclusion of the Solana blockchain’s “epoch 370” staking lockup period, according to a statement from the Solana Foundation on Thursday.

The foundation had tweeted late Wednesday that about 28.5 million SOL tokens scheduled to be unstaked had been re-staked due to a policy change of cloud service provider Hetzner on Nov. 2.

Those tokens are owned by the Solana Foundation’s treasury and had been staked as part of a delegation program, according to the tweet.

“While 28.5M SOL was in the process of being unstaked during this epoch, the plan to unstake has now been postponed, and all 28.5M SOL have now been re-staked,” according to the tweet thread.

The FTX connection

The SOL price fall appeared to be tied to speculation surrounding this week’s drama involving the rapid deterioration of erstwhile billionaire Sam Bankman-Fried’s crypto empire, including the FTX exchange and Alameda Research trading firm.

Riyad Carey, research analyst at crypto data firm Kaiko, told CoinDesk on Monday that SOL is Alameda’s second-largest holding, and it also holds significant amounts of SOL ecosystem tokens including MAPS and OXY.

The speculation was Alameda might need to dump its SOL tokens to raise liquidity.

SOL’s price recently rose 27% to around $17 after plunging as low as $12 in the past 24 hours. (Crypto markets were broadly higher; the CoinDesk Market Index jumped 11%.)

Solana didn’t specify the exact change of the data center provider that caused the restaking action, after a request for comment from CoinDesk. Hetzner didn’t immediately return for comment as of press time.

A new Solana staking epoch

An “epoch” on the Solana blockchain refers to the time period when staking rewards are earned and then issued. Validators will lock in their stake on the blockchain during this period, which takes about two days, and can choose to unlock the tokens once the epoch is over.

The new epoch period, known as 371, started Thursday morning, with currently around 660,000 SOL tokens, worth more than $11 million, already scheduled to unstake after the lock-in period ends, according to Solana Compass.

Eliézer Ndinga, director of research at crypto investment products firm 21.co, said that some operational indicators of the Solana blockchain, such as user adoption, still look healthy.

The number of applications built on top and the retention rate of the developers is also “a testament” to the ecosystem’s overall health, Ndinga said.

“I believe that there is nothing that is structurally damaging for the Solana adoption itself,” he told CoinDesk. “Solana should come up stronger as long as, of course,” [it remains].

Trending1Markets Daily Podcast CoverMarkets Daily Crypto RoundupWeekend Story: 8 Days in November – What Led to FTX’s Sudden CollapseNov 12, 20222CDCROP: Elon Musk Awarded With Axel Springer Award 2020 In BerlinBusinessElon Musk Reveals Talks With Sam Bankman-Fried: "My Bullshit Meter Was Redlining"Nov 12, 20223Breaking News Feature ImageBusinessFTX Says It Moved Remaining Funds to Cold Wallets to 'Mitigate Damage' After 'Unauthorized Transactions'Nov 12, 20224CDCROP: Crypto Exchange FTX Grapples With 'Liquidity Crunch' As Binance Deal Fades (Leon Neal/Getty Images)BusinessCrypto Fund Galois Capital Has Half of Its Capital Trapped on FTXNov 12, 2022

Source coindesk.com

Related posts

Hashrate y precio de ethereum classic crecen mientras mineros se preparan para la nueva realidad post fusión

Blake Goodwin

Crypto Gaming Token AXS Under Pressure as $215M Unlock Looms for Axie

Blake Goodwin

LUNA, de Terra, se desploma más de 30% y deja atrás suba

Blake Goodwin

Leave a Comment