The State of Solana DeFi - January
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 $6.2 billion with a 24-hour volume of $800 million. The price of SOL is $16.84 and its market dominance is 0.68%. The Total Crypto Market Cap is $916.44B, up 1.46% 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 impact that the FTX crash had on the Solana ecosystem. One month later, we will cover data suggesting a far different picture. Although certain metrics such as TVL & DEX Volume have not yet shown a complete recovery, they are signaling a comeback.
The overall sentiment around Solana has shifted to positive in the last few weeks, largely due to the growth of a culture coin called BONK, support from the Ethereum Founder, Vitalik, and a realization that Solana was undervalued given its fundamentals.
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
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 $17.50 and has been consistently around the $16.00 range.
Major Resistance at $19.25
Major Support at $14.00
Total Value Locked (TVL)
TVL has experienced similar volatility to the Solana Token.
It hit a monthly high of $290M on December 17th, and a monthly low of $200M on January 1st.
It has been slightly trending higher in the last two weeks, given the rise of memecoins such as BONK and FRONK, as well as the overall sentiment shift around the ecosystem.
DEX Volume
The volume of decentralized exchange (DEX) on Solana was at its lowest point in December since May 2022, largely due to the impact of the FTX crash on several prominent DeFi projects.
However, the data shows that confidence in the Solana ecosystem has been regained as the volume of DEX in January has already surpassed that of December. In fact, DEXs on Solana have already processed over $800 million in January, a nearly $270 million increase compared to the full month of December.
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 increase around 80% month-over-month (MoM), from ~339K to ~610K. Solana had its biggest day of the month on January 5th, with almost 680K active addresses in a single day. For reference, Polygon and Ethereum Active Addresses grew 6% and -4.5%, respectively, in the same period.
Data confirms a strong sentiment shift in the Solana ecosystem, from a period of panic to strong growth.
Drill-Down to the Protocol Level
Data suggests that the BONK airdrop has brought the NFT community closer to DeFi.
As a token airdropped to dozens of NFT collections, BONK was a much-needed bridge between both worlds, as many NFT users utilized Solana DeFi platforms for the first time.
Jupiter Aggregator, Orca, and Raydium benefited the most from the memecoin mania, and have further established themselves as the Solana go-to DEXes.
DeFi Majors Market Cap & Growth
The FTX bankruptcy is still present in everyone’s minds. However, recent weeks show a recovery of trust and confidence back in the Solana ecosystem.
The most resilient teams post-FTX are becoming market leaders in several metrics. Orca is processing the most volume on a daily basis, having reached over $50M on the day that BONK peaked.
Priority Fees
The use of priority fees on Solana has become a popular topic due to the recent 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 includes 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.
Conclusion
On-Chain data shows that although the DeFi ecosystem is still a long way from pre-FTX levels, the wounds are starting to heal. The NFT and DeFi communities are becoming more connected. 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.
Data shows an ongoing restructuring of the DeFi ecosystem, with liquidity flowing into the most resilient and transparent protocols. Many on-chain metrics show increased activity on dApps in the last three weeks, which seems to be breaking the year-long downtrend in activity.
Take a Step forward in your Crypto Journey with us on:
Twitter 👉 @StepDataInsight
Discord 👉 Step Finance