Serum, a decentralized exchange (DEX) built on the Solana mainnet, announced Tuesday that it has become “defunct” due to its ties to the bankrupt crypto derivative exchange FTX. The protocol also stated its ongoing revival plan.
Serum’s Affiliation With FTX
In July 2020, Sam Bankman-Fried (SBF), the founder of FTX, published a Twitter thread that shows he is tied to the creation of the Solana-based DEX. He stated in the thread that Serum is a “decentralized ecosystem” that is “truly, fully trustless.” A month later, Serum got launched on the Solana network.
Protocols built on the Solana blockchain can upgrade smart contracts. This feature is necessary as it can aid the protocol in fixing any vulnerabilities existing in the system. This, therefore, bolster the protocol’s security. For smart contract upgrades to occur, an upgrade authority is needed. This authority enables the individual or organization holding the private key to conduct the upgrade.
The upgrade authority for Serum’s smart contracts is held by FTX. This implies that the security of the decentralized exchange lies at the mercy of FTX.
Serum Becomes “Defunct”
In its latest announcement, the Solana-based protocol noted that users and top DeFi protocols had exited its platform. Two of those cited were Jupiter aggregator and liquidity provider Raydium. The reason for this was the fact that FTX held its upgrade authority.
Its native token, SRM, has equally been impacted by the development unfolding. SRM, which achieved an all-time high of $13.78 in September 2021, now struggles around $0.2. Note that the token fell from a trading price of $0.8 shortly before the FTX drama began. At press time, SRM trades at $0.24.
SRM was also delisted by the popular crypto exchange Binance.
According to data from DefiLlama, Serum now holds a total value locked (TVL) of $426,400. Its value is more than 99% lower than its ATH of $1.88 billion in TVL.
Serum’s Revival Plan
As Serum loses the interest of many users, the Serum team noted that “there is hope.”
A community-led fork of the Serum V3 program has been launched. The fork is dubbed the OpenBook DEX. Serum noted that the forked protocol generates above $1 million in daily trading volume.
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