FTX: Solana is free from its shadows

Solana appears to be on track for a full recovery, with several metrics nearing pre-FTX bankruptcy levels.

• Introduction

• Token Price

• Total Value Locked (TVL)

• Stablecoin Supply

• Daily Active Addresses

• DEX Volume

• Relevant Ecosystem News since FTX

  • BONK

  • Solana Grizzlython

  • Tensor

  • Helium Migrates to Solana

  • Solana Crossroads

• Conclusion

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Introduction

In what could be considered the most tumultuous month for the crypto industry in recent years, November was tough for everyone.

The incidents involving FTX and Alameda will forever serve as a stark reminder that centralization is not the solution. Only through a decentralized foundation can true transparency be achieved.

Solana experienced significant setbacks during that month. Despite the prevailing uncertainty surrounding its future, the technology's fundamentals have improved.

Today we will dive into the current State of Solana with the latest on-chain data and the most relevant Solana news since November.

TOKEN PRICE

The Solana token (SOL) went through a period of heightened volatility and decreased value, reaching its lowest point at $8.00 due to fear, uncertainty, and doubt among investors. However, at this point of fear and instability, the token found its bottom and has been on an upward trend since then.

It reached its highest point at $27 and has been consistently around the $20-$22 range.

• Major Resistance at $28

• Major Support at $20

TOTAL VALUE LOCKED (TVL)

TVL has been rather stagnant since the crash.

It hit a monthly high of $340M on November 17th, and a low of $269M on November 30th. It has been stagnant, currently hovering at $270M. Although this number is unsurprising given the recent events, data shows that the liquidity has concentrated in the top protocols.

STABLECOIN SUPPLY

Stablecoins are a structural part of any decentralised ecosystem. They facilitate trading on exchanges, transactions and payments. 

They are also incremental to DeFi. Protocols need deep liquidity to function properly, which can only be obtained from a stable asset like USDC.

Per the European Central Bank, Stablecoins provided around 45% of the liquidity in decentralised exchanges (DEXes) in May 2022. This number is expected to grow as decentralised protocols gain traction and develop more user-friendly UI/UX.

The Solana Stablecoin Circulating Supply is currently at $1.5B. It recorded a range high of $3.5B, and has been steadily declining since. It is important to note that $1B worth of Tether (USDT) left the ecosystem through a chain swap to Ethereum.

DAILY ACTIVE ADDRESSES

The Solana Daily Active Addresses chart shows the daily number of unique addresses active on the network as a sender or receiver.

Since the FTX crash, the daily active addresses on Solana have declined by around 25%. In the last three months, Solana has averaged 250K daily active addresses, the same as Ethereum and Polygon.

DEX VOLUME

The trading volumes on the decentralized exchanges of the Solana blockchain have almost reached the same levels as before the FTX crash. Four months before the FTX crash (July-October), the volumes were at $5.54 billion. In the months of January to April, DEX volume reached $5.46 billion.

RELEVANT ECOSYSTEM NEWS SINCE FTX

BONK

The rise of BONK led to a revival of the Solana DeFi ecosystem, as many DeFi protocols rushed to integrate BONK trading, staking, and LP farming. As a result, more users added liquidity to DeFi, and weekly DEX volume on Solana increased by over 200%, while overall DEX volume across all blockchains increased by less than 3%.

In addition, BONK may have created a connection between Solana NFT and DeFi, as many NFT users who had never used any Solana DeFi protocol before were introduced to it through the memecoin.

SOLANA GRIZZLYTHON

The Solana Grizzlython had 10,000 participants from 70 countries and a record-breaking 800 projects submitted. 91% of participants plan to continue developing their hackathon projects full-time and secure seed funding. University students submitted 37% of the projects, indicating Solana's appeal to the next generation of creators. Despite being held during a bear market, Grizzlython grew 45% compared to the previous hackathon.

TENSOR

Tensor, a startup focused on NFT trading on the Solana blockchain, raised $3 million in a funding round. The funding was led by venture capital firm Placeholder, with participation from other notable investors such as Solana Ventures and Big Brain Holdings.

Tensor has been consistently delivering customer-oriented improvements to its product. By doing so, it has taken over the NFT trading market share, thus dethroning Magic Eden. Users support the platform claiming a seamless and easy user experience.

HELIUM MIGRATES TO SOLANA

The Helium Network, a DePIN project, has migrated onto Solana, thus shutting down its own blockchain. With nearly 1 million hotspots onboarded, the Helium community increasingly focuses on commercial demand for the network.

SOLANA CROSSROADS

Solana Crossroads is an in-person event organized by Step Finance, in partnership with several prominent organizations of the crypto ecosystem such as Coingecko and The Defiant.

The first-ever Solana Crossroads event took place in Istanbul, for several reasons. Turkey is one of the biggest crypto adopters in the world, with over 35 Million Adults having had contact with it one way or another. The country has one of the youngest populations in the world. The goal of Crossroads is to expand blockchain, and more specifically Solana, to the Turkish crypto community. The first event was a success, with an attendance of over 1,500 people.

CONCLUSION

On-Chain data shows an ongoing restructuring of the DeFi ecosystem. Liquidity is concentrating on the protocols that show the most resilience and transparency. The developer ecosystem remains robust and more engaged than ever with the Solana community. The Solana ecosystem is consistently improving, with improvements to the network being made on a monthly basis. Although metrics like TVL show a significant decline from FTX levels, others reveal the birth of new narratives and use cases. DEX Volume has returned to FTX levels and is set to continue to grow in 2023.

Overall, the last 6 months have proven that Solana is a highly resilient ecosystem with a strong, dedicated user base and network effect.