Metaplex, a developer of the Solana NFT protocol, said on November 17 that the firm had implemented a full-scale layoff. The ripple effect of last week’s collapse of the crypto exchange FTX continues to affect the Web3 ecosystem.
Co-founder and CEO Stephen Hess said today through Twitter that many staff had been laid off owing to the deteriorating market conditions in the cryptocurrency industry and Solana in particular.
“Since Metaplex is the base layer of the Solana NFT ecosystem, it’s our core responsibility to ensure the long-term sustainability of the protocol for the benefit of the community,” he said. “We are deeply grateful for the contributions of everyone impacted by this change. It will be my top priority to help these former team members quickly find new roles in the ecosystem while pushing ahead on critical path work.”
How Metaplex Plays a Key Role for Solana
Solana (SOL), a decentralized NFT network that aims to compete with Ethereum, uses the Metaplex protocol to power its NFTs. The startup started at the beginning of 2022, having successfully raised $46 million from investors like Jump Crypto, Multicoin Capital, and one of the living legends of the NBA, Michael Jordan.
During the bear market, it wasn’t until September that the company published its native governance token, MPLX. Unfortunately, the value plunged significantly right after its release.
Solana NFT sales dropped significantly in October, and there has been a noticeable decrease in market enthusiasm in recent weeks due to discussions about better royalties for the creators and more rewards for the collectors.
Then, in November, FTX fell.
It pulled down everything associated with Solana, the most preferred network of FTX’s founder Sam Bankman-Fried (SBF). Many speculate that because of Bankman-Fried’s outspoken support for Solana, his influence brought Solana’s prices to a new low. SOL’s value fell by 60% after FTX collapsed, three times as much as Bitcoin’s and Ethereum’s losses.
Solana Foundation – the institution that holds the Solana network together – lost millions of dollars in investments related to FTX and its subsidiaries. The close relationship between Bankman-Fried and the network has influenced the Solana ecosystem the most.
SBF has built notable Solana-based businesses, such as the decentralized exchange Project Serum and an NFT platform around Solana technology. Now, the NFTs are stuck in the platform due to the chapter 11 bankruptcy filing and John J. Ray III, the new acting CEO of FTX, taking action to resolve SBF’s wrongdoings.
The layoffs announced by Metaplex are just one more example of the far-reaching ramifications of FTX’s demise that have yet to be fully quantified.
The failed crypto exchange’s fallout and its founder seem to cause a domino effect to be isolated and obscure parts of the crypto industry. However, some experts say that the destruction of FTX may lead Solana in a better direction now that the technology is not correlated to SBF and his companies anymore.