At the time of writing, the Solana market cap is $7.8 billion with a 24-hour volume of $800 million. The price of SOL is $20.93 and its market dominance is 0.77%. The Total Crypto Market Cap is $1.02T, down 4.2% in the last 24 hours.
Summary
Introduction
Token Price
Total Value Locked
DEX Volume
Daily Active Addresses
Drill-Down to the Protocol Level
DeFi Majors Market Cap & Growth
Priority Fees
Conclusion
Introduction
In our last State of DeFi piece, we covered the BONK rise to fame. Almost one month later, we will cover data suggesting a different picture. Although certain metrics such as TVL have not yet shown a complete recovery, others are signaling a comeback in DeFi, which counters the narrative that the downfall of SBF and Alameda/FTX ruined Solana DeFi forever.
Data shows that the sentiment around Solana has considerably improved since January 1st. In addition to a revival of the Solana DeFi and NFT ecosystem, the overall sentiment in Crypto shifted from panic to greed in January, fuelling a broad rally in most crypto assets.
Today we will dive into the current State of Solana DeFi with the latest on-chain data and the most relevant news of the week.
Token Price
Similar to most major cryptocurrency assets, Solana went through a period of increased volatility to the upside, following the momentum from its bounce off the $8.00 lows.
It reached its highest point at $26.80 and has since been ranging in the $20.00 to $26.00 area.
Major Resistance at $27.00
Major Support at $20.00
Total Value Locked (TVL)
While December was a tough period for Solana, January was the consolidation. TVL has been rather stagnant month-over-month, as DeFi seems to struggle with retaining users and investments.
It hit a monthly high of $285M on December 26th, and a monthly low of $242M on January 11th.
However, BEN SPARANG◎ (@bennybitcoins), the Head of Strategic BD of the Solana Foundation, took a different approach to interpret TVL. By introducing on-chain volume to the TVL data, @bennybitcoins calculated “DeFi Velocity”, which paints a different picture.
Although the Solana DeFi ecosystem has been through a lot of hardship over the last quarter, it still remains the most actively used on a DeFi Velocity basis, as introduced by @bennybitcoins. On a 7-day volume, Solana has a score of 1.83 while ETH has a score of 0.43.
DEX Volume
In December, the volume of decentralized exchanges (DEXs) on Solana was at its lowest point since May 2022, largely due to the impact of the FTX crash on several prominent DeFi projects.
On the other hand, January was the second biggest month by Volume in the last 12 months. Market sentiment, Solana confidence recovery, memecoin madness, and founders doubling down on the chain, all contributed to a rally on all metrics.
In January 2023, volume reached $1.93B, almost four times higher than the previous month.
Daily Active Addresses
The Solana Daily Active Addresses chart shows the daily number of unique addresses that were active on the network as a sender or receiver.
The daily active addresses decreased around 28% month-over-month (MoM), from ~610K to ~434K. Solana had its biggest day of the month on January 11th, with almost 644K active addresses in a single day. For reference, Polygon and Ethereum Active Addresses grew -38% and 4.5%, respectively, in the same period.
Drill-Down to the Protocol Level
Data suggests that the BONK airdrop has brought the NFT community closer to DeFi.
Since its peak, the majority of dApps show a steady reduction in Daily Active Addresses, although activity still remains higher than pre-BONK levels.
Data shows that Jupiter Aggregator, Orca, and Raydium are the most used protocols for decentralized trading.
DeFi Majors Market Cap & Growth
The FTX bankruptcy is still present in everyone’s minds. However, data shows that January brought a recovery of trust and confidence in the Solana ecosystem.
Orca is processing the most volume on a daily basis, having reached $138M in volume in the last 7 days, followed by Raydium and Lifinity.
Priority Fees
The use of priority fees on Solana has become a popular topic due to the now distant FTX crash and increased activity on the network.
Many users have turned to this practice as a result of the memecoin boom, which led several Solana DEXs to update their user interfaces and include the option to set priority fees.
This is necessary due to the high level of congestion on the network, which causes normal fee transactions to fail multiple times. The widespread adoption of priority fees is a positive sign of network strength, adoption, and appeal, particularly in a bear market.
Data shows a solid increase in priority fees, from 20% to 50% of the total non-voting transactions.
Conclusion
On-Chain data shows that although the DeFi ecosystem is still a long way from a full recovery, the wounds are starting to heal. In addition, both NFT and DeFi projects are finding new ways of integrating the best of each other into innovative products for the Solana ecosystem.
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