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Is Solana’s [SOL] FUD justified? According to these analytics…

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Is Solana's [SOL] FUD justified? According to this analyst...

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  • As per recent data, Solana’s downtime woes may not be as bad as they seem.
  • Daily active users and fees continued to decline as SOL suffered.

In the past 12 months, Solana [SOL] has faced significant scrutiny from the cryptocurrency community, largely due to issues with downtimes on its network. However, if recent data is to be believed, some of the negative attention may not be entirely warranted.

Is your portfolio green? Check out the Solana Profit Calculator

Fall down seven times, get up eight

According to Messari, Solana has improved its technology and updated its network every time it has faced downtime issues.

Even though there have been improvements to its technology, many remain skeptical about Solana’s DeFi growth, citing its declining TVL as an indicator of the network’s declining health. However, it was important to note that a lot of the activity on the Solana network has been because of derivatives, NFTs, and de-pin networks, which do not contribute to Solana’s TVL.

Messari analysts further speculated that if Solana turns on network incentives, its TVL could be on par with other L2 chains. At press time, the TVL of Solana was $277.37 million, after falling by 2.43% in the last 24 hours.

DeFi’ng the odds

Although Solana’s TVL has continued to decline, the overall volume of AMM’s (Automated Market Makers) has increased. AMMs are decentralized exchange mechanisms that use mathematical algorithms to set asset prices based on supply and demand, allowing anyone to buy and sell assets without a traditional order book or centralized exchange.

The sudden increase in the trading activity of these AMMs may show a favorable development for Solana within the realm of DeFi.

Source: Solscan

Solana developers have also been working on other updates to improve the state of Solana’s DeFi.

Realistic or not, here’s SOL market cap in BTC’s terms

However, despite the efforts shown by these developers, the number of active users on the Solana network has declined by 17.5% over the last 30 days. Due to this, the revenue generated by the network also fell by 8.2% in the same period, according to Token Terminal’s data.

Source: Token Terminal

SOL sees red

SOL has been under pressure recently due to a drop in its prices over the last few days, which coincided with a decline in its trading volume and an increase in volatility. This heightened volatility could make cautious investors hesitant to purchase SOL in the future.

Source: Santiment


Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
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