The FTX estate’s fire sale of $7.5 billion worth of locked Solana (SOL) has sparked a bidding frenzy, with several investment firms vying for a piece of the action. This massive sale of 41 million tokens represents a unique opportunity for investors to gain exposure to SOL, a rapidly growing cryptocurrency.
According to sources close to the discussions, Galaxy Asset Management, chosen by the estate for its discreetness and cost-effectiveness, is managing the token allocation. Interestingly, some prospective bidders are even raising additional funds to participate in this high-demand sale.
Neptune Digital stands as the first company to publicly acknowledge its purchase from the FTX estate, acquiring 26,964 SOL tokens at $64 each. However, with a twist – only 20% of these tokens will unlock in March 2025, with the remaining portion gradually unlocking over a period extending until 2028.
Investment Funds Vie for a Locked-in Opportunity
Galaxy Trading, a prominent player in the mix, is raising capital from investors, offering them access to these locked SOL tokens at the same $64 per token price point. However, investors participating in this fund should be aware of a 1% management fee. Additionally, while staking rewards will be distributed based on purchases, these rewards will unfortunately remain locked alongside the underlying tokens themselves.
The sale process hasn’t been entirely smooth sailing, with a couple of sources reporting a 13% reduction in their allocations after final approval from the FTX estate. This highlights the estate’s ultimate control over the distribution process.
Underexposed Investors Drive Demand
Several factors are fueling the strong demand for these locked SOL tokens. A key driver, according to one source, is the realization by investors that they may have missed out on significant gains as the price of SOL has risen rapidly in recent times. This urgency to gain exposure to SOL, even in a locked format, is pushing investor interest.
Also Read: Solana DEX Trading Volume Hits $50 Billion, But Solana Co-Founder Extends Olive Branch to Ethereum
Beyond Galaxy: Other Funds in the Race
Galaxy isn’t the only player in this high-stakes game. Investment giants like Pantera and Phoenix were reportedly raising funds for similar purposes – acquiring locked SOL from the estate. Pantera reportedly aimed for a $250 million slice of the pie, with a 0.75% management fee and a 10% performance fee. However, sources suggest their bid might not have been successful. Similarly, efforts by Phoenix to raise funds for a locked SOL strategy seem to have fallen short.
FalconX, another prominent crypto investment firm, was also reportedly in the running, attempting to secure a large chunk of the locked SOL tokens through a significant bid.
Beyond SOL, A Broader Token Sale
While locked SOL dominates the headlines, it’s important to note that Galaxy Asset Management is also facilitating the sale of 42 other tokens, primarily built on the Solana and Ethereum blockchains. This broader sale encompasses tokens like GateToken, Atlas, Shadow Token, and even Bitfinex’s UNUS SED LEO token, with a combined value of roughly $211 million.
The FTX estate’s token sale presents a unique opportunity for investors seeking exposure to the cryptocurrency market, particularly the high-growth Solana ecosystem. However, with locked tokens and associated fees, careful consideration is crucial before diving into this complex investment landscape.
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