Bear Market Must-Read Series: The Rise and Fall of the Solana Dynasty

A narrative woven of lies, wildly inflated indicators, 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 translations. Let's review the rise and fall of $SOL. I am usually a positive person, but Solana somehow triggered the author's nerves. 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 the SOL Dollar to the Top

Solana’s Inflated Data Indicators

The Current State of Solana Ecosystem and Where It’s Heading 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 is nothing wrong with this, it’s time to stop reading now. According to Solana, 11.3 million of these tokens were loaned out to a "market maker". Now we know that this market maker must be Alameda Research & FTX, Sam and Caroline respectively. This is the first time Solana has shown their true "personality". I highly recommend reading this thread by @Justin_Bons, who perfectly explains this incident.

The second lie, which I call the 'biggest DeFi scam', happened in 2021. Long story short - the dramatic rise of $SOL was due to 'Fugayzi, fugazi'... or also known as "fake". All of this was carefully planned by two brothers.

You might say, this is no big deal, but let me explain. At the beginning of $SOL's rise, the main Solana ecosystem protocol was the Saber Protocol. With the popularity of DeFi last year, TVL became a key indicator for investors. The Macalinao brothers knew this and decided to do something with $SOL's TVL number.

What did these "masterminds" do? They created the identities of 11 independent developers, making it seem like they were working for different projects. These projects took advantage of the Lego properties of the DeFi ecosystem and double-counted a large amount 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 after mixing this scam with excellent marketing, some extra CT hype, participation from top VCs, and well-known market makers - what was the result? 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
- Number of transfers (TXS)
- Developer activity

You know how some traditional companies use adjusted EBITDA? We all hate it, right? Well, Solana is using the 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 it was a good strategy to inflate the numbers. In this case, that includes the validator votes (around 90%).

Finally, a recently discovered "problem" - developer activity. You can see @tokenterminal updated their chart and admitted their mistake. Kudos to them because these previous numbers did not make sense at all. The updated version states that $SOL only has 72 active developers.

But to be honest, I was surprised by Solana’s response. They claim that Solana has a total of 2,053 active developers working on projects that integrate with Solana, 1,654 of whom are focused solely on Solana, and 120 full-time active developers. The conclusion is left to your own judgment. The following other factors are also part of the reason for Solana’s collapse. I can dig deeper and cover these topics:
-SBF and Caroline
- Serum
- USDT mysterious coin
- Censorship
- Network "outage"
But let’s focus on the current state of affairs. Solana has been struggling and currently has a TVL of around $200 million.

I keep seeing on CT that $SOL is going to have a run up... Oh boy - let me tell you something. Your $SOL token has been overpriced ever since the watered down TVL and the perception change. The result? $SOL has had the highest MC/TVL in the past year. And it's peaking now.

Solana has long been known for its diverse and prosperous NFT ecosystem.
Well - two days ago, Solana’s two largest NFT collections decided to leave and migrate cross-chain to $MATIC and $ETH.
@DeGodsNFT
@y00tsNFT
For more detailed information, you can read this tweet of mine:

That's no big deal, you might say again. But I tell you, it's not.

This post is directed to the $SOL leadership. The $SOL community is one of the strongest out there, and it's time to get back to work. Prove to everyone, including the author, that $SOL is truly a top team. Start by showing honest and real data. This will be very difficult though. I'm not trying 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. Kudos to him.

If you want to read more about the $SOL controversy, I also recommend reading this recent thread by @Justin_Bons.