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FTX’s Sollet Token (SoBTC) May Create Yet Another Bearish Wave

10 Nov, 20222 min readBitcoin
FTX’s Sollet Token (SoBTC) May Create Yet Another Bearish Wave

An unspoken problem has been found on the internet by the evil-eyed Twiterattis. Things are not looking good for the Solana ecosystem’s wrapped Sollet tokens, specifically soBTC, which are used widely across lending and AMM services. The main catch here is that nobody knows if the tokens are issued by FTX or Alameda.

1/ One of the most challenging and unspoken issue facing the @solana ecosystem are the wrapped Sollet tokens, namely soBTC, which is used widely across lending and AMM platforms.The problem? These tokens are issued by FTX (or Alameda, no one really knows)— meow (@weremeow) November 9, 2022

Wrapped crypto tokens are cryptocurrencies used on the DeFi platforms that are pegged to the value of another original cryptocurrency or other assets like gold, equities, shares, and real estate. To assist in creating liquidity in the market, SOBTC tokens were introduced early in the Solana DeFi cycle.

They were also designed to be backed 1:1 by either BTC or ETH. The Solana team developed Wrapped SOL to encourage greater acceptance and utilization of the Solana network (WSL). A secure multi-sig wallet containing SOL tokens that back WSL in a 1:1 ratio.

These wrapped assets were reportedly issued by FTX and backed by FTX-owned assets. Solscan estimates that SOBTC’s market capitalization at the moment is $264,125,805.80, with 16,149.99 being the current supply.

8,361 people are the total number of holders, which puts them at risk due to the price’s fast fluctuations following the FTX collapse. The SOBTC is currently trading at $15,497 and the BTC is currently trading at $16,400. Although, they are pegged at a 1:1 ratio.

$soBTC … — cryptojet (@CryptoFiendd) November 10, 2022

People on the internet are concerned that the wrapped Sollet tokens, $soBTC, created by FTX and used across lending and AMM platforms, may drop to zero even though this problem has not yet been discussed. It’s possible that they won’t accept the wrapped BTC wallets as well now that FTX has ceased accepting withdrawals. It should be emphasized that FTX is Solana’s one of largest liquidity providers.

At the time of writing, one SOBTC is trading at $12,956 and is down by 30 percent. It has hit a low of $8,636 in the last 24 hours.

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