FTX creditor payments are officially flowing, but the big question is: How much of that will make its way back into the markets and what kind of an impact could it have? The Solana ecosystem could certainly use a pick-me-up right about now!

The state of the memetic economy:

Despite the ongoing backlash against pump.fun from the fallout of the LIBRA memecoin rug, the Solana memecoin-maker is still seeing a weekly average of 330k tokens launched at a graduation rate of 1.07%.

In contrast, the number of AI agents launched on Virtuals Protocol on Base have cratered to a weekly average of 80-200.

— Donovan Choy

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Show me the money

Blockworks has published 520 articles on FTX over the years, including a play-by-play of the exchange’s implosion and its aftermath.

Given the company’s scale and influence, the FTX bankruptcy was a surreal experience for those of us working full-time in crypto in November 2022.

But down it went! And for the thousands of customers left with assets stranded in bankruptcy limbo, it was painful. At the time, I don’t think anyone would’ve expected that two years and three months later, creditors would be seeing 120% recovery of those funds. (Yes, yes, I know — only in depreciated nominal terms from the petition date — and many have missed out on realizing gains from the bull market of 2023-24, but still…)

It could have been a lot worse.

Unsecured creditors typically recover a fraction of their claims in bankruptcy cases. FTX paying effectively 9% interest on the USD value is a rare outcome.

At any rate, creditor payments are now flowing. According to multiple members of the “FTX 2.0 coalition” Telegram group, Kraken — one of two official distribution partners for the FTX estate — credited accounts on schedule around 10:00 am ET. Many claimants who selected BitGo are still waiting as its website is apparently buckling under the traffic influx — though that should be short-lived.

Around $1.2 billion in total is eligible to be paid to creditors with claims under $50,000. But for now, that will only include creditors who completed all preliminary steps including KYC with FTX — I’ve seen 70% or so mentioned — and around a third of those claims (an estimated $400m worth) were resold. That money is most likely not coming back into crypto.

So, let’s assume $400 million will be available to original FTX users today. What will they do with that cash?

Given the current market sentiment, I’d bet they won’t put it all back into the market. And perhaps not even most of it. No matter where you think bitcoin is going long term, or what your views are on a “super cycle,” you have to at least entertain the possibility that the top is in for a good long while. Folks who were burned by FTX — uncertain for years whether they would see any of that money — are prone to be cautious.

Not everyone agrees. Mena Theodorou, co-founder at crypto exchange Coinstash, suggests Solana (SOL) may be a major beneficiary.

“FTX’s historic investments in SOL and the Solana ecosystem make it likely that some of these funds will flow back into the network, especially since SOL has been a standout performer, rising over 500% in the past year, with strong onchain activity and developer growth continuing to fuel demand,” Theodorou told Blockworks.

I’m not so sure. In the wake of the latest memecoin scandal, SOL has now broken through a key daily support level on both the USD and BTC charts. For aggressive dip buyers, this arguably could be an opportunity, but for many it’s time to panic.

Even if I’m wrong on the trader psychology, this isn’t likely to be the big liquidity injection that some have been hoping for. The vast majority of the claims in nominal terms are those greater than $50k — some $17b worth — and for any of that to re-enter crypto we’ll have to wait at least a few months longer. 

— Macauley Peterson

0xResearch Analyst Roundtable

How do we feel about ETH?

Marc Arjoon: The upgrades like PeerDAS, Fusak, and blob scaling need to get done faster. Pectra got pushed back to Q2 April and there’s still no official date yet, so I’m not too happy on that front. I was also surprised by the impact of tariffs on ETH’s price. I don’t know if that’s due to the fact that ETH is used a lot in DeFi collateral — which created a cascading sell pressure effect during big liquidation events, but it does take away from Ethereum’s “store of value” narrative.

Where are all the apps?

Danny Knettel: There are plenty of apps like Photon or BullX that are revenue-generating, though they are memecoin trading apps. REV (real economic value) for all chains in January was $830 million while application revenue was around $800 million. The earning power of applications are growing, but it’s just not the kind of apps that the industry wants to talk about.

Darren Mims: It's people moralizing over memecoin-related revenues. There's this hate between “true” altcoins and memecoins.