Aftermath of the FTX Crisis... NFT and DeFi Markets Also 'Cooling Down'

NFT Trading Volume Drops 13% on the 19th Compared to Previous Day
DeFi Deposits Also Plummet
Significant Impact on Solana Related to FTX Connection

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Lee Jung-yoon] The global cryptocurrency exchange FTX filed for bankruptcy protection in a U.S. court due to a liquidity crisis, and the aftermath is spreading beyond the coin market to non-fungible tokens (NFTs) and decentralized finance (DeFi).

According to blockchain analysis platform IntoTheBlock and others on the 21st, NFT trading volume on the 19th was recorded at $14.42 million (approximately 19.3 billion KRW), down 12.76% from the previous day.

The NFT market was not spared from the FTX incident. Although NFT trading volume had been declining due to decreasing popularity, the drop steepened after this incident. Comparing the $25.96 million trading volume on the 7th, when Binance CEO Changpeng Zhao announced the sale of FTX-issued coin FTT and the crisis began in earnest, the volume fell by 44.45%.

Looking at trading volumes by blockchain, last week NFT trading volume based on Ethereum was $8.71 million, which is an 86.02% plunge compared to the $62.31 million volume from the 13th to the 20th of this month. Additionally, Solana-based NFTs, closely linked to FTX, recorded $2.06 million last week, dropping 80.26% during the same period. Alameda Research, an affiliate of FTX, has supported the Solana project, and its financial statements showed a high proportion of both FTT and Solana.

Market voices are warning about the ripple effects of the FTX bankruptcy crisis. Previously, cryptocurrency venture firm Multicoin Capital stated, "The FTX incident could lead to further collapses," and warned that "many trading companies could be swept away or shut down."

The DeFi market is experiencing a similar situation. According to DeFi analysis platform DeFiLlama, the total deposits shrank from $54.73 billion (approximately 73.63 trillion KRW) on the 7th of this month to $41.61 billion as of the previous day.

In particular, Solana-related DeFi deposits sharply decreased. During the same period, they plunged nearly 70%, from $937.04 million to $290.34 million. Furthermore, the Solana-based DeFi project Serum, developed by FTX founder Sam Bankman-Fried, had deposits exceeding $100 million before the crisis but recorded only $4.2258 million as of the previous day.