Step Data Insights - The State of Solana DeFi - November
This Week we take a look at the most recent DeFi metrics and the most relevant news in the ecosystem.
At the time of writing, the Solana market cap is $5.16 billion with a 24-hour volume of $500 million. The price of SOL is $14.09 and its market dominance is 0.6%. The Total Crypto Market Cap is $859.28B, down 1.54%.
Summary
Introduction
Token Price
Total Value Locked
Stablecoin Supply
Daily Active Addresses
DeFi Majors Market Cap & Growth
Relevant Ecosystem News
Zeta Markets is back
Hubble Protocol reaches $1B USDH volume
High Reliance on Serum
Raydium has been exploited/hacked
Conclusion
Introduction
November was likely Crypto’s most eventful month in years, unfortunately for the wrong reasons.
FTX and Alameda will forever be present in our memories as a reminder that centralisation is never the answer. Transparency is only possible with a decentralised network as the base layer.
Solana suffered the most in November. Although we’re going through a period of undeniable uncertainty in the future, the technology remains the same. Diamonds are formed under immense pressure, and data shows that Solana is in this process.
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
Since the FTX crash, most of the Crypto Market has been stagnant and experiencing a period of low volatility. The SOL token price reached the monthly low of $10.94 on November 22nd, while subsequently having its highest daily close of November at $14.63, just four days later.
Major Resistance at $15.00
Major Support at $13.00
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 slightly downtrending, currently hovering at $280M. Although this number is unsurprising given the recent events, data shows the remaining liquidity is now flowing into the best protocols.
Stablecoin Supply
Stablecoins are a structural part of any decentralised ecosystem. They facilitate trading on exchanges, transactions and payments. One of the most important use cases of stablecoins is that they allow users to hold non-volatile assets on blockchains.
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 $1.9B. It recorded a monthly high of $3.5B, however it 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 that were active on the network as a sender or receiver.
The daily active addresses declined around 18.27% month-over-month (MoM), from ~416k to ~340k.
Although the decline is quite sharp, a 1-month timeframe is not enough to draw a fundamental conclusion. However, the 3-month chart shows a clear downtrend in unique daily active addresses.
Users can have multiple active wallets on the network so this does not necessarily mean that there are less people utilising it. The slowdown can be partially explained by the sharp decline in new NFT mints, which reduces the amount of burner wallets being used on a daily basis.
For context, after a 55% drop in daily active addresses on a 90 Day time frame, Solana is still at the top, occupying the 4th position after the Binance Smart Chain, Ethereum and Polygon.
DeFi Majors Market Cap & Growth
While the dust is settling, it is becoming evident that most of the liquidity is flowing into the most prominent DeFi projects such as Marinade, Orca, Quarry, Lido and more. Mercurial Finance has had a whopping 121% rise to $28M in TVL in the last 30 days.
Cega.fi is by far one of the major candidates to becoming one of the top protocols by TVL in 2023, as they launch more unique products in their exotic options portfolio. The protocol has registered a 200% increase in TVL in the last 30 days, now at $19M. Cega is looking to position itself as the market leader of the Solana Decentralised Options investing platforms.
Relevant Ecosystem News
Zeta Markets
Zeta Markets is an innovative Decentralised Trading Platform on Solana which achieved impressive numbers since launch, with over $100M traded in a 7 day period. However, it halted operations due to the FTX & Serum collapse.
They have now successfully launched on main-net without hiccups. In order to boost liquidity on the protocol, a new set of incentives and rewards will be announced in the coming days.
Hubble Protocol reaching $1B USDH
Hubble is a decentralised finance protocol built on Solana. Hubble's core product is USDH, a decentralised stablecoin that can be borrowed against your crypto assets.
This week, Hubble reached two major milestones:
Over 50 Million $USDH has now been minted since Hubble went live on mainnet in January 2022
The $USDH stablecoin has reached over $1 Billion in volume since it’s January 2022 mainnet launch
Raydium exploited/hacked
The Solana ecosystem woke up on Friday shaken by another unfortunate DeFi exploit, this time on Raydium.
There are no official details by the team other than a statement claiming to be an exploit. On the other hand, crypto researchers are collecting data that suggests the root cause was a private key compromise. The hacker drained several liquidity pools, causing Raydium’s TVL to drop ~22%, from $47M to $37.4M.
High Reliance on Serum
There is an ongoing restructuring process on many DeFi protocols, which suffered from the FTX crash first-hand. Serum, an incremental piece of the Solana DeFi ecosystem, was one of the protocols which suffered the most.
Raydium, Zeta Markets, PsyOptions and many others built on top of the protocol. Serum’s contracts are controlled by admin keys held by FTX, which could put many of the projects, and a vital part of the Solana ecosystem at risk if a Serum hard-rug happens.
@openboodex is a community-led fork of Serum that was created for this exact reason. Although it temporarily passed Serum in Daily Active Users, Serum has retaken the lead, suggesting that many protocols have not migrated yet.
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. There is finally a visible connection between the community and the DeFi protocols.
Although most metrics show a slowdown of activity on the chain, it is too early to establish a trend of any sort.
Protocols like Marinade Finance, Zeta Markets and Cega Fi are pushing the ecosystem forward by having a product-centric approach allied with a user-oriented development of their products.
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thanks for the reply. Ok then. thats probably no how I would have phrased uit. But all up great article. Keep them coming !
“ Serum, an incremental piece of the Solana DeFi ecosystem,” did you men Integral ?