- While Solana saw growth on multiple fronts, TVL declined
- On-chain metrics showcased a pessimistic outlook, with some traders turning bearish
Multiple dApps and DEXs on the Solana network have seen an uptick in activity over the last few days. However, this spike in activity on Solana may not be enough for the chain to take part in this bull run.
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The DEX in question would be Drift Protocol, with the same recording an ATH recently in terms of daily active users.
Drift saw an ATH in daily active users yesterday! Our favorite part isn't how many new users we're seeing, but how many of you all are returning to use the exchange on a regular basis. Truly grateful for your continued support ? pic.twitter.com/OARK9f7E7x
— Drift Protocol v2 (@DriftProtocol) March 14, 2023
Another dApp – Light Protocol –ย witnessed an improvement in terms of activity on the Solana network.ย The protocol verifies ZK SNARKs on the network. At press time, the protocol had managed to complete over 2 million transactions.
Despite the success of Solana’s protocols, however, the overall TVL of the network declined. It fell from $281 million to $243.06 million over the past few weeks alone.
Source: Defi Llama
The decline in Solana’s TVL was accompanied by a decline in interest for its NFTs. According to data from SolanaFloor, for instance, the protocol’s blue-chip NFTs struggled to grow over the last month. This contributed to a hike in the overall volume of NFTs sold on the protocol from $119,662 to $49,385.
Source: Solanafloor
Some more problems on the horizon?
The decline in NFT interest would be due to increasing negative sentiment that has been growing around Solana. With multiple downtimes and failures, many in the crypto-community have turned skeptical about the future of the Solana network.
In fact, SOL has also suffered during this time period. According to Santiment’s data, the trading volume for SOL fell from 3.41 billion to 1.36 billion. The price volatility, however, continued to hike. Higher volatility would make many risk-averse traders shy away from buying SOL.
Realistic or not, here’s SOL market cap in BTC’s term
However, development activity on the Solana network surged over the last few weeks. This spike in development activity suggested that the frequency with which developers on the Solana network have been contributing to its GitHub is high.
This could imply that new updates and upgrades may be on their way for Solana in the future.
Source: Santiment
However, the promise of new upgrades hasn’t been enough for traders to become optimistic about the future of Solana.
In fact, according to Coinglass’ data, 52.08% of all trades against Solana have been short positions.
Source: coinglass
