Investors un-staked a record amount of SOL when they got their tokens back from the blockchain’s security system. It could have been much more, though. The price of SOL went up by 18%.
A record number of SOL tokens from the Solana blockchain were released from the blockchain’s security system on Thursday. This happened a day after crypto analysts said that some investors might try to cash out their holdings because the price of digital assets had dropped.
But the price of SOL went up on digital asset markets after the Solana Foundation, which supports development on the blockchain, said it would delay a plan to unstake about 28.5 million tokens.
A statement from the Solana Foundation on Thursday said that 63 million SOL were ready to be unstaked at the end of the “epoch 370” staking lock-up period on the Solana blockchain.
Late on Wednesday, the foundation tweeted that about 28.5 million SOL tokens that were supposed to be unstaked had been re-staked because cloud service provider Hetzner changed its policy on November 2.
The tweet says that these tokens belong to the Solana Foundation’s treasury and were staked as part of a delegation program.
“During this epoch, 28.5M SOL were in the process of being unstaked. The plan to unstake has now been put on hold, and all 28.5M SOL have been re-staked,” the tweet thread says.
The link between FTX
The drop in the price of SOL this week seemed to be related to rumors about the rapid fall of former billionaire Sam Bankman-crypto Fried’s empire, which included the FTX exchange and the Alameda Research trading firm.
Riyad Carey, a research analyst at crypto data company Kaiko, told a news outlet on Monday that SOL is Alameda’s second-largest holding and that it also holds a lot of SOL ecosystem tokens like MAPS and OXY.
People thought that Alameda might have to sell its SOL tokens to get more cash.
In the last 24 hours, SOL’s price fell as low as $12 and then went up 18% to around $17. (Most cryptocurrency markets were up, and the CoinDesk Market Index went up 11%.)
After being asked for comment by a news correspondent, Solana didn’t say exactly what change in the data center provider caused the reversal. As of press time, Hetzner hadn’t come back to talk right away.
A new Solana staking epoch
On the Solana blockchain, an “epoch” is the amount of time during which staking rewards are earned and then given out. During this time, which lasts about two days, validators will lock in their stake on the blockchain. Once the epoch is over, they can choose to unlock the tokens.
The new epoch period, known as 371, started Thursday morning. According to Solana Compass, more than $11 million worth of SOL tokens is already set to be unstaked after the lock-in period ends.
Eliézer Ndinga, the head of research at 21.co, a company that sells crypto investment products, said that some operational indicators of the Solana blockchain, like the number of users, still look good.
Ndinga said that the ecosystem’s overall health can be seen in the number of apps built on top of it and the number of developers who stay with it.
“I don’t think there’s anything structurally bad about the Solana adoption itself,” he said in a newsletter. “Solana should get better as long as they stay, of course.”
