The atmosphere seems to be getting tenser in the crypto ecosystem following the implosion of Sam Bankman-Fried-founded FTX Derivatives Exchange.
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After a little silence about layoffs, Solana-based Non-fungible token (NFT) protocol Metaplex has resumed the trend. The decentralized protocol cited the indirect impact of the FTX collapse as the reason behind the layoff.
Co-Founder and Chief Executive Officer (CEO) of Metaplex Studio Stephen Hess, took to Twitter to announce that they are reducing their headcount by a massive cut. In his 7-thread tweet, he also mentioned that the protocol’s treasury is still intact as it was not directly affected by the FTX Derivatives Exchange collapse.
“While our treasury wasn’t directly impacted by the collapse of FTX and our fundamentals remain strong, the indirect impact on the market is significant and requires that we take a more conservative approach moving forward,” the CEO tweeted.
Hess declared that in the future Metaplex will have its focus on key initiatives including ‘Royalty Enforcement, Creator Studio, Fusion, Compression and continued improvement of dev tools and SDKs’. Solana (SOL) has greatly felt the impact of the recent implosion. Its token SOL has dropped by up to 60% in value which is about triple the effect on Bitcoin (BTC) and Ethereum (ETH).
FTX Contagion Sweeps Across the Crypto Industry
So far, the FTX contagion has been evident sweeping through several firms. Multicoin Capital, one of Metaplex’s creditors issued a letter to its investors which suggest that the FTX contagion may wipe out many crypto firms in the coming week. Already, Multicoin Capital’s prices have experienced a downward trend of 55% in this month alone which was a result of the liquidity crunch.
“We expect to see contagion fallout from FTX/Alameda over the next few weeks. Many trading firms will be wiped out and shut down, which will put pressure on liquidity and volume throughout the crypto ecosystem. We have seen several announcements already on this front, but expect to see more,” the letter stated
In effect, Multicoin Capital decided to write down its assets in the FTX Derivatives Exchange pending the conclusion of its bankruptcy proceedings. Similarly, Temasek Holdings announced its decision to write down its $275 million investment in the exchange irrespective of the bankruptcy filing outcome.
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