- FTX Real Estate sells $2.6 billion worth of Solana tokens.
- Figure Markets purchases 800,000 SOL tokens for $80 million.
- Solana prices fell 4% to $169 after the sale.
FTX, once one of the largest cryptocurrency exchanges, is experiencing liquidations, most notably its massive Solana holdings. The exchange was a major early backer of Solana and has monetized billions of dollars worth of SOL.
Most recently, FTX sold its last SOL tokens at a steep discount, with companies like Figure Markets and Pantera Capital purchasing large quantities of the token.
FTX Estate’s Solana Token Sale Discount
FTX Real Estate recently completed a $2.6 billion Solana (SOL) token cash auction, attracting notable buyers such as Figure Markets and Pantera Capital. The sale, completed on Friday May 24, was part of FTX’s broader efforts to liquidate assets following its high-profile bankruptcy.
Figure Markets secured a block of 800,000 SOL tokens for approximately $80 million, equivalent to approximately $102 per token. This price represents a significant discount; at the time, Solana was trading for $169. Pantera Capital also participated in the auction, but details of the purchase have not yet been disclosed.
As with previous SOL auctions, all tokens will be subject to a four-year vesting period. This means that the tokens are locked and buyers cannot sell them immediately. Instead, it will be unlocked gradually over four years, starting with 20% in March 2025. The remaining tokens will be unlocked monthly until 2028.
Why are Solana tokens sold at a high discount?
Due to the long vesting period, buyers are taking on the risk that the price of Solana may decline before they have full access to Solana tokens and can sell them. To compensate for this risk, tokens are sold at a significant discount. Previously, some of these tokens were selling for $60, about 68% below the market price.
The vesting period is necessary because it prevents tokens from suddenly entering the market due to significant downward pressure. By gradually unlocking tokens over time, the market is better able to absorb the increased supply.
Additionally, these token sales allow FTX assets to transfer SOL volatility risk to third parties. This means that FTX creditors do not have to worry about SOL prices in the long term. Moreover, the discounted SOL price provides a good indication of what institutional investors think the SOL price will do over the long term.
On the flip side
- Despite the risks associated with FTX’s large SOL holdings, Solana has performed noticeably well since the initial collapse following the FTX collapse. Solana is up 756.94% from $20 this time last year.
- FTX originally held 41 million Solana tokens, which were valued at approximately $7.6 billion at the time of sale. This accounts for more than 10% of Solana’s total market capitalization.
Why This Matters
Even at a discounted price, the participation of major players such as Figure Markets and Pantera Capital indicates the institutions’ strong interest and confidence in Solana’s long-term potential.
Learn more about the FTX bankruptcy:
The FTX Insolvency Foundation aims to make claimants whole by the end of 2024.
Learn more about Aptos challenging Solana:
Did Aptos actually beat Solana in day trading?