Solana’s stablecoin volume is falling for the first time in over a year. The last 7 days saw a decline of $772 million in stablecoins on SOL. All of that and more went into stablecoin supply on Ethereum.
And we all know why. Libra. It’s left a bad taste in the mouths of many. For some, it’s a step too far. Is Libra going to kill Solana’s reputation? Or worse, the chain itself? Plus, there’s a huge token unlock coming soon. It couldn’t come at a worse time. Let’s see how bad the damage is.
Is Solana an Enabler of Scams?
We reported on Monday about Libra in detail. One thing we mentioned was the big picture question. “Is this just part of truly permissionless decentralized finance? OR do they know they are enabling these scams so the chain and apps can benefit? On Monday, it wasn’t clear. It’s clearer now, though. And not in a good way.
It’s fair to remember that scams and gambling often help chains improve their performance or find their place in the market. It happened with Ethereum twice, with the ICO craze of 2017 and the NFT craze of 2020-21. And they came out of it OK.
That said, Ethereum was seen as a neutral party. The scams were blamed properly on the scammers themselves. However, new information is coming out, including from the pro-Solana news source Solana Floor, among others. And this new info is about a long term scheme to extract as much value as possible out of SOL memecoin casino users.
BREAKING: SolanaFloor has obtained exclusive video evidence exposing a $200M+ memecoin extraction scheme tied to @KelsierVentures , @MeteoraAG and @WEAREM3M3_ .
The footage, featuring DeFi Tuna Founder @CavemanDhirk and Ben Chow, lends further credibility to allegations of… pic.twitter.com/rjPLBgKCjG
— SolanaFloor (@SolanaFloor) February 17, 2025
This implicates Kelsier Ventures and Hayden Davis, whom we talked about on Monday. But it also implicates Ben Chow co-founder of Meteora, who was instrumental in LIBRA’s launch and rug. Chow has since resigned due to his partner’s citing a “lack of judgment”. This text thread says it all. “We are going for maximum extraction on this one”. More info is coming out that this is an inside job that was known and planned well in advance.
Ben chow (Meteora) resigned today according to a statement from @weremeow, Meteora’s cofounder… citing a “lack of judgement”
I don’t think we’ve heard the end of this. https://t.co/JoQqzs69GR pic.twitter.com/Fers1p2LLd
— Coffeezilla (@coffeebreak_YT) February 18, 2025
More evidence on this comes from Meteora and Jupiter co-founder Meow. He says a Jupiter employee, not Chow, was sniping specifically on Kelsier Ventures led memecoin token launches on M3M3 then listed on Jupiter later. Solana Floor reported on this as well.
YCC founder and crypto threader Duo Nine shows here, along with a couple of others how using Bubblemaps and other on-chain data that Melania and Libra were from the same team. That and the previously mentioned sniping by insiders proven on-chain, too.
1/ Melania and Libra were inside jobs. Jupiter and Meteora teams appear to have facilitated it.
Both protocols were co-founded by meow, the Jup CEO. The lead at Meteora just resigned after this.
On-chain data shows they had prior knowledge these tokens would launch. A small
pic.twitter.com/lLU1hLfkrT
— Duo Nine
YCC (@DU09BTC) February 18, 2025
It’s difficult at this stage to see exactly how bad this is for Solana, Meteora, and Jupiter. But:
- It’s VERY, VERY bad.
- They are not credibly neutral and are encouraging this scammy behavior.
Part of this is a culture issue and the fact that Solana achieved its growth through the memecoin casino. The damage from FTX almost put them out of business. And now this. Now, FTX could be helping with repayments starting. What do you think? How bad is this for Solana, Meteora, and Jupiter? Let us know in the comments below.
Can FTX Repayments Help?
FTX repayments are hitting the market. The repayments are happening at the prices of the 2021 collapse, though, so all these gains in the last 3.5 years are gone. I’m sure investors just feel happy to get something back, though.
Tomorrow, Feb 18, 2025, at 10 AM ET, is the 1st distribution of FTX repayments
$1.2B will be distributed:
– 28.75% of that didn’t do KYC
– 33.33% are claim buyers who likely won’t invest in crypto
– leaving only ~$400M (original holders)Don’t believe all the fake info from… pic.twitter.com/ValqNFXfyg
— Jack Green
(@JackGreenCrypto) February 17, 2025
It’s $1.2 billion dollars worth in this first payout. It looks like small accounts are getting paid out first at 2021 basis price plus 9% interest. The other accounts will receive 20.5% interest, which is still way less than the gains they would have made. Can these payments help?
There’s no question that some of these people will take their money and leave the market, given the experience they’ve had. It’s understandable, too. Many think most will keep their money in the market, though. But will it be on Solana or in its ecosystem? This chart presents a good analysis of what could happen based on how much moves to Bitcoin and how much stays in alts.
You can figure most that goes into Bitcoin is lost to Solana forever or at least long term. The alts, though, are a different story. If you noticed more ads and promos recently, it’s because exchanges and alt projects knew this day was coming. They hope that increased awareness and the new liquidity from these repayments will bring some added volume to their exchange or ecosystem.
Solana, one of the fastest-growing chains in the crypto world, is facing serious backlash over multiple rug pulls linked to meme coin launches on its network.
Critics, including analysts and traders, are targeting Solana’s core principles, especially after the controversial…
— Bitcoin.com News (@BTCTN) February 19, 2025
But what about Solana? It was damaged by its close relationship to SBF and FTX already and went down to $8, as we all know by now. Solana is taking a hit for sure. While I cherry-picked to find this comment, they are hardly alone. It didn’t take long to find. It leads back to the earlier question about being neutral for permissionless transactions. Given that Solana:
- It is a VC chain.
- Had a slippery relationship with FTX.
- Enabled all this fraud in memecoins.
Are they even a net positive for the industry or a negative? That we can even ask this looks very bad for Solana and these DEXes.
Token Unlock and Conclusion
Solana’s unlock on March 1st is for 11.2 million tokens. It’s a big one. Almost $2 billion dollars. We can’t tell if this will increase selling pressure or if people will look past it as they have done on other unlocks.
In 10 days, Solana will release 11.2M tokens, people say that this unlock is already priced, but is it really? Wouldn’t it be better to take an interest in $INJ, which already has all tokens unlocked?
Injective is waiting for people to come
pic.twitter.com/85v7SZJhVq
— quizmp
Aside from the scammers such as Kelsier Ventures, the 3 main players in this saga are Solana, Meteora, and Jupiter. Solana has taken a hit. And it’s not going away anytime soon. We also think of the 3 that Solana is the least guilty. They don’t appear to have any direct involvement, although many of the Solana OGs do.
Meteora and Jupiter are a different story. They are directly involved. At best, they allowed this and had some employees go rogue. At worst, they are directly involved in extracting money from dedicated SOL users and the Solana ecosystem as a whole. Both could take a while to recover or maybe not even regain the volumes at the height of the memecoin craze.
Solana could do a lot to improve its credibility with the public if it helps lead to prosecutions of the criminal acts that happened on their chain.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
The post Is Solana’s Future at Risk? Key Issues Threaten Its Stability appeared first on Altcoin Buzz.
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