The altcoin market is watching Solana-based projects take off after FTX’s bankruptcy. On November 29, an FTX and Alameda-backed project officially announced it would cease operations.
The expected end for this Solana-based altcoin project
Solana-based DEX protocol Serum (SRM), launched in part by FTX, announced the termination of the project in a new announcement today. The project team stated that the bankruptcy was due to the collapse of Alameda and FTX. The titles of the long flood are as follows:
- With the collapse of Alameda and FTX, the Serum program on the mainnet has been terminated
- Moving away from JupiterExchange and RaydiumProtocol Serum
- Efforts to fork Serum for reconstruction strengthen
- The future of SRM is rather uncertain. There are those in the community who still recommend using it, and there are those who suggest it should not be used at all due to the FTX/Alameda collapse.
What's next for @ProjectSerum
With the collapse of Alameda and FTX, the Serum program on mainnet became defunct.
As upgrade authority is held by FTX, security is in jeopardy, leading to protocols like @JupiterExchange and @RaydiumProtocol moving away from Serum.
— Serum (@ProjectSerum) November 29, 2022
The serum team also stated that the money flow was reset after the FTX and Alameda bankruptcy. They point out that a new Terra-like blockchain would make more sense for recovery efforts:
Unfortunately, with the existence of Openbook, Serum’s volume and liquidity have dropped to almost zero. Users and protocols are safe by using an alternative fork like Openbook, after finding the security risks in the old Serum code.
Serum is in trouble since FTX hack
Solana developers forked the widely used token liquidity hub Serum, after FTX was taken over by a hack that led to a series of unauthorized transactions on Nov. In a Twitter thread, Mango Max said that the Serum update key is not controlled by the Serum DAO, it is controlled by a private key connected to FTX, and no one can verify who controls the keys. The private key was required to update the original version of Serum. It led the developers to fork the code because it was under FTX control.
Confirming that we turned off @ProjectSerum as a liquidity source a few hours ago due to security concerns about upgrade authorities, and we also encouraged all our integrators to do the same.
The ecosystem is working on a fork right now, and we will supporting it asap 🔥
— Jupiter 🪐 (@JupiterExchange) November 12, 2022
Now the team explains that the collapse of FTX and Alameda “ended” the program. In this regard, “Security is at stake as the upgrade authority belongs to FTX. It causes protocols such as Jupiter and Radium to move away from Serum”. Solana-based DEX aggregator Jupiter informed users on November 12 that SRM will be disabled as a source of liquidity. Also, Binance disabled a number of trading pairs last week affecting tokens, including SRM. The serum thus saw almost zero new buyers due to the negative news flow.
Altcoin price drops with news of fork
The serum price had reacted to the news in November with an initial rise. It rose from the low of $0.12 to as high as $0.32. The serum team struggled to implement an emergency fork following security concerns triggered by the FTX hack. This led to a sharp drop in SRM price. The Binance delist news you follow from Kriptokoin.com was the second big blow.
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