A narrative woven of lies, various indicators that were madly inflated, and subsequent developments based on this until the collapse...
I also see too many familiar shadows in this story, so will $SOL become the next $EOS?
@CharlieXYZ_ wrote this thread, and I made some translation changes. Let’s take a look back at the rise and fall of $SOL.
I’m usually a positive person, but Solana somehow triggered a nerve in this author. Many people don't know the story behind the whole process, so please read this thread.
The authors will cover these topics:
- The lie that pushed SOL dollars to the top
- Solana’s Inflated Metrics
- The current state of the Solana ecosystem and where it will go next
Let's start with the part about lies.
The Solana team stated that the total circulating supply in April 2020 was 8.2 million tokens – but an independent third party discovered a wallet that actually stored 13 million $SOL tokens!
If you think there's nothing wrong with this, now's the time to stop reading.
According to Solana, 11.3 million of these tokens were loaned out to a “market maker.”
Now we know that the market maker must be Alameda Research & FTX, Sam and Caroline respectively.
" Solana Will Reduce Its Token Supply to Account for Market Making Allocation "
This is the first time Solana shows their true "personality".
I highly recommend reading this thread by @Justin_Bons, he articulates the incident perfectly.
The second lie, which I call “the biggest DeFi scam,” happened in 2021.
Long story short – $SOL’s dramatic rise is due to “Fugayzi, fugazi”… or as we know it, “fake”.
All of this was carefully planned by the two brothers.
You might say, that’s no big deal, but let me explain.
At the beginning of the $SOL rally, the main Solana ecosystem protocol was the Saber protocol.
As DeFi grew in popularity last year, TVL became a key metric for investors.
The Macalinao brothers knew this and decided to do something with $SOL’s TVL numbers.
What did these "masterminds" do?
They created the identities of 11 independent developers to make it appear as if they were working on different projects. These projects took advantage of the Lego properties of the DeFi ecosystem and double-counted large amounts of funds, resulting in billions of double-counted value appearing on Solana.
At its peak, it accounted for 70% of the TVL of the SOL ecosystem.
Well – the DeFi track, including the author himself, didn’t really understand it before the summer of 2022.
But mix this scam with great marketing, some extra CT hype, top VC involvement, and well-known market makers --
What are its results?
The price of $SOL rose to over $250 in November 2021.
But not all investors care about TVL, right?
Well – Solana is even known for inflating other key metrics, which can be described as pretty “remarkable”.
- TPS
- Transfer(TXS) Number
- Developer activity
Do you know how some traditional companies use adjusted EBITDA? We all hate it, right?
Well, Solana is using an adjusted TPS metric.
The pink ones in the chart below are real TPS, and the rest are validator votes.
The same applies to the number of transactions.
Somehow, Solana thought inflating the numbers was a good strategy. In this case, that includes the validator vote (around 90%).
Finally, a recently discovered “problem” – developer activity.
You can see @tokenterminal updated their chart and admitted their mistake. Give them a thumbs up here because these previous numbers just don't make sense.
The updated version states that $SOL has only 72 active developers.
But to be honest, I was surprised by Solana’s reaction.
They claim that Solana has a total of 2,053 active developers working on projects that integrate with Solana, with 1,654 of them focused solely on Solana and 120 full-time active developers.
The conclusion is left for you to judge.
" Measuring Developer and User Activity on Solana: December 2022 "
The following other factors are also part of the reason for Solana's crash. I could dig deeper and cover these topics:
- SBF and Caroline
- Serum
- USDT Mysterious Minting
- Censorship
- Network "outage"
But let’s focus on the current situation.
Solana has been struggling and currently has a TVL of around $200 million.
I often see on CT that $SOL is about to enter a period of growth...
Oh boy – let me tell you something.
Your $SOL tokens are already overpriced ever since the inflated TVL and people's perception of them changed.
What's the result? Over the past year, $SOL has had the highest MC/TVL.
And it’s at its peak right now
.
Solana has long been known for its diverse and thriving NFT ecosystem.
Well – two days ago, Solana’s two largest NFT collections decided to leave, migrating across chains to $MATIC and $ETH.
@DeGodsNFT
@y00tsNFT
Extension:Solana NFT Escape》DeGods announced migration to Ethereum! y00ts will also move to Polygon
For more detailed information, you can read this tweet of mine:
It’s no big deal, you might say again.
But I tell you, it’s not.
This Post is for the leadership of $SOL.
The $SOL community is one of the strongest out there and now is the time to get back to work. Please prove to everyone, including the author, that $SOL is truly a top-notch team.
Please start by presenting honest and real data.
Although it will be very difficult.
I don’t mean to take points away from Solana here, but I absolutely agree with this:
As I was researching more about this topic, I stumbled upon an article and thread by @tomiwa1a.
It’s crazy that he created this masterpiece in January and didn’t even know about the inflated TVL.
Like him.
If you want to read more about the $SOL controversy, I also recommend reading this recent thread by @Justin_Bons.
(This article is the author's personal opinion and does not represent the position of Dongqu. The content and opinions of the article are not investment advice.)
