Stellar Submissions: In the News - FTX, Alameda, and the Solana Ecosystem

Stellar Submissions is a series of articles by MetricsDAO wherein we highlight bounty submission best practices by showcasing the grand prize winners of our bounty programs. Our goal with this is to sharpen the skills of on-chain analysts, raise the overall quality of bounty submissions, and share the unique insights uncovered by our stellar analyst community.

In this edition of Stellar Submissions, we will highlight the first place winner of our In The News bounty series about FTX, Alameda, and the Solana Ecosystem.

Key Takeaways on Best Practices:

1. Set the context early

A clear context sets the tone of the analysis and it also helps build the overall narrative. This narrative brings together a lot of the moving parts in a comprehensive bounty submission.

2. Increased complexity needs a clearer methodology

The more complex an analysis, the clearer your methodology needs to be presented. Make sure this has a clear and concise explanation in the analysis write up or dashboard itself.

3. Guide the reader

Any competent analyst can put together a dashboard with just a bunch of charts compiled together. However, what makes a quality submission stand out is the ability to relate these charts and metrics together with a woven narrative, perhaps through a simple twitter thread or even a blog post. It helps the reader fully understand your thought process and the insights you want to convey. Not only that, it also showcases your skill as a data storyteller.

First Place Winner

Analysis: The Effects of FTX & Alameda on the Solana Blockchain

Author: Marqu

Much has been said about the whole FTX/Alameda collapse and its impact on the crypto ecosystem. Only a handful, however, have done a comprehensive and focused analysis on its impact to a specific ecosystem and perhaps none were better than Marqu’s deep dive on the Solana Ecosystem. He covers the price of Solana’s native token $SOL and its swapping activity, the inflow and outflow of the token from Centralized Exchanges (CEX), $SOL staking activity, and caps it off with cross-chain activity as he covers the Wormhole bridge movements.

Marqu starts off by setting the context of his analysis and giving the reader a brief explainer of what he will cover. He explains the relationship of Alameda and FTX and how they were early investors in the Solana ecosystem. What started as rumors became facts and he mentions how the survival of the Solana ecosystem would depend on the survival of its token $SOL itself.

Brief context setting on FTX and Alameda, and the importance of the $SOL token

This early tone setting is important as you would want to immediately convey the importance of your analysis to the reader.

Another reason why Marqu’s write up stands out is that he does not immediately jump straight into the analysis. Instead, he first lays out some important details of his methodology, including setting the time frame of the analysis.

Key points on the methodology as well as some disclaimers

The more comprehensive your analysis, the more important it is to layout key details like these. This gives readers some extra confidence in your work as they can verify the data and results themselves if needed, something quite unique to vast open datasets like we have in crypto.

As he dives into the analysis, Marqu demonstrates his ability to weave together a narrative using on-chain data and off-chain events. You can see this in how he explains the steady descent of the $SOL price over the period, with links to developments around FTX.

Figure 1: $SOL Price Chart

By not only focusing on the price movement itself as caused by the news, and instead looking into on-chain trading volume, he is able to give more context behind the data with price-volume concentrations and some reasoning behind people’s actions.

Figure 2: $SOL Trading Volume and Distribution by Price

Marqu is then able to seamlessly transition to his next topic which is $SOL’s swapping activity. He mentions key points here like the users’ flight to safety in terms of asset-type (stablecoins) and what specific asset it was (USDC).

Figure 3: $SOL Trading Pairs

The next notable thing about Marqu’s analysis is his great usage of different visualization types to drive home key insights. You can see it in his demonstration of how users are withdrawing their $SOL from CEX’s en masse, which is perhaps a sign of eroding trust in centralized institutions.

Figure 4: $SOL Deposits and Withdrawals on Centralized Exchanges

Using a combination of charts again, he then breaks down deposits according to some of the main crypto exchanges and makes a reasonable claim that “users changed their behavior to first make their actions on the blockchain and then use the CEX just as a way of withdrawing to fiat”. This again drives home the point of the decreasing trust in CEX’s; people are maybe just using them for more basic actions like crypto on- and off- ramps.

Figure 5: $SOL Deposits by Centralized Exchange

You can also see this use of multiple data visualizations when he covers $SOL staking activity. He used a combination of scatter plots, combo bar-line charts, and even tables. While any analyst can flood a dashboard with multiple charts, the real skill is having each one serve a purpose that is not redundant, which is something Marqu is able to do.

Figure 7: $SOL Staking Events by Amount and Count
Figure 8: Staking Actions Tables

With this we can see that while there have been plenty of withdrawals of staked SOL, new $SOL has actually been added and delegated to validators as of November 11 given how dynamic the behavior behind these numbers are. However, there also have been plenty of deactivations of stake, which can be withdrawn later on and reduce the amount of staked $SOL by 10% as of the analysis period.

Capping off with his last topic on the Wormhole Bridge activity, Marqu demonstrates all of the aforementioned best practices: he sets the tone with a quick statement on the importance of the Wormhole bridge, explains a key point about his methodology wherein he used all bridge assets, uses a combination of different visualizations, and finally walks the reader through a concise narrative. His point is that while the bridge movements early on were massively outwards, the ecosystem is showing some resiliency in the latter part of the analysis period with assets going mostly inward.

Looking Forward

The conclusion during the period covered in this analysis (November 8-11) was that while there is still a lot of uncertainty on the full effects of FTX’s collapse on Solana, it looks like on-chain activity indicates that “users feel slightly more confident about the likelihood of Solana surviving this incident and they return to pick things back up.”

It has been two weeks since that time which can be like two years in crypto. What is the outlook now? Has the price of $SOL shown some resilience? Did staking deactivations peter out? Are assets moving mostly into Solana through the Wormhole bridge?

We will try to cover these and more in our next Twitter spaces.

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