SRM, the governance token of Serum, a DEX built on the Solana blockchain, skyrocketed on Nov 15 as the project’s key backers planned an emergency fork in response to the hack of FTX. SRM rallied from a low of $0.118 on Nov 14 to a high of $0.35 at the time of writing.
Riyad Carey, an analyst at blockchain analytics firm Kaiko Research, believes that the increase in SRM price is mainly due to the support and solidarity of the community for this hard fork. Kaiko Research noted in a Nov 14 research report that SRM suffered a sharp drop in market depth on crypto exchanges last week because of the collapse of the Sam Bankman-Fried’s empire, including the FTX exchange and investment fund Alameda Research.
However, that all seems to have changed thanks to the hard fork. Based on the total number of SRM tokens on the Serum order book, SRM’s liquidity on Binance is now higher than it was before the crash. This is a sign that market makers have been building up support on Binance for SRM since the crash.
Solana co-founder Anatoly Yakovenko confirmed that developers depending on Serum forked the program because so many protocols depend on Serum markets for liquidity and liquidations. So, it can be said that Serum plays an extremely important role in the Solana ecosystem. Another well-known validator, Brian Long, also tweeted that the effort to replace Serum with a community-led open-source version has renewed market’s interest.
In fact, the collapse of FTX-Alameda last week pushed the Solana community into the abyss. 134.54 million SRM and 3.43 million FTT tokens of Solana Foundation got stuck on FTX as the exchange suspended withdrawals on Nov 6. The Solana ecosystem has also wiped out nearly $700 million, with a 70% decrease from the $1 billion in total value locked (TVL) on Nov 2.
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