Solayer Price Has Crashed This Week, Wiping Out Millions of Dollars in Value

Solayer is a blockchain company that offers restaking solutions on the Solana ecosystem. To some extent, its solution resembles that of EigenLayer, which provides these solutions on the Ethereum network.

Solayer price crashed this week, erasing millions of dollars in value. After soaring to a record high of $3.4 this month, the LAYER token nosedived to a low of $1.5892. This drop brought its market cap to $354 million, down from the year-to-date high of $627 million.

So, is it safe to buy the Solayer dip?

Why Solayer Price Crashed

Solayer is a blockchain company that offers restaking solutions on the Solana ecosystem. To some extent, its solution is similar to EigenLayer, which provides these solutions on the Ethereum network.

Solayer also offers a Visa card that lets users deposit and spend their USDC tokens globally. Its sUSD T-Bill offers holders the chance to earn up to 4% in yield.

Solayer has accumulated over $116 million in assets, much lower than the year-to-date high of over $520 million. This occurred despite increased staking inflows on Solana this year.

The main Solayer news of the week is that its LAYER token plummeted by more than 40%, erasing almost $300 million in value. It was unclear why the token crashed, although analysts cited an upcoming unlock.

Solayer will unlock 43.40 million tokens, valued at $78 million at current prices, on May 16. These coins will go to airdrop recipients, the foundation, and the community. In addition to that, the network will unlock tokens worth over $90 million later this year and $386 million next year.

Solayer has 210 million tokens in circulation against a total supply of 1 billion, and its vesting schedule will end in 2029. Unlocks usually lead to user dilution by increasing supply, especially when demand is low.

However, it is highly unlikely that the token unlock alone is the reason why the LAYER price crashed since there have been other unlocks recently. The crash is likely due to Solayer insiders selling tokens as the coin had risen almost 500% since March to its highest level this year.

Learn From Mantra Crash Before Buying Layer Dip

This week’s Solayer crash is similar to the recent Mantra price plunge. As reported by Benzinga, Mantra dropped by more than 90% in a 24-hour period last month, in a move that the team said was due to liquidations. However, some analysts said the crash was due to insider selling.

Like Mantra, the Solayer crash has made it significantly cheap as it has moved from almost $3.4 to below $3. This rapid price shift may make it more attractive to investors to buy the Solayer dip, just as those who wanted to accumulate Mantra as it fell from $9 to below zero.

The risk, however, is that the Solayer price may react like Mantra did and continue crashing. Also, there is always a risk for timing the market.

The most likely scenario is where the LAYER price forms a bearish flag or pennant here and then continues falling. This is because real believers have lost faith in it, and it may drop below $1 in the coming weeks.