Evaluating the state of Solana [SOL] ecosystem post FTX demise
- TVL held on Solana has declined by over 60%.
- User activity across the network also fell.
- SOL offered no respite to users as it has since fallen by 62%.
Severely impacted by the sudden collapse of cryptocurrency exchange FTX, total value locked (TVL) held across decentralized finance (DeFi) protocols housed within the Solana [SOL] network has since declined by 67%, data from DefiLlama revealed.
Read Solana [SOL] price prediction 2022-2023
According to the DeFi TVL aggregator, on 6 November, when Binance founder and CEO Changpeng Zhao first tweeted about his exchange’s decision to liquidate all the remaining FTT holdings on its books, Solana’s TVL stood at $1 billion.
Eleven days later, Solana’s TVL has dropped by over 65% to be pegged at $335 million, at the time of writing.
Solend, Solana-native lending, and borrowing protocol saw the most decline as its TVL fell from $307 million on 6 November to $32.04 million by press time.
Leading SOL staking platform Marinade Finance recorded a 67% decline in its TVL within the same period. With a TVL of $95 million, Marinade Finance remained the protocol with the highest TVL on Solana as of this writing.
The reason for the decline in TVL across the Solana chain was attributable to a severe drop in active users across these protocols due to the fear that the network might collapse because of its close ties to disgraced Samuel Bankman-Fried.
However, user inactivity was not immediate. On-chain data from Dune Analytics revealed a surge in the count of DeFi daily active users on Solana between 7 November and 9 November.
This was so as users rallied to remove their assets, comprised of a significant volume of stablecoins and Solana-based tokens from several protocols on Solana.
After that, DeFi daily active users on the chain began to drop. Between 9 November and press time, this declined by over 60%, data from Dune Analytics showed.
Down goes the merry-go-round
In addition to the drop in TVL on Solana, data from Dune Analytics revealed an overall decline in daily active users (DAU) on the entire network during the period under review. At 113,566 daily active users as of 16 November, the DAU count on Solana fell by 25% since CZ’s first tweet on 6 November.
Of the leading NFTs marketplaces housed on Solana, DigitalEyes saw the most decline in user activity since 6 November. According to data from Dune Analytics, its DAU count fell by 80% within the period under review.
During the same period, leading marketplace Magic Eden suffered a 33% fall in daily user activity.
Still reeling under the impact of the general market decline, SOL’s price was down by 62% since the FTX issue began, data from CoinMarketCap showed.