Assessing Solana’s ecosystem as SOL drops 7% in 24 hours

• Solana’s ecosystem saw impressive growth over the last few months.
• Despite this, the protocol faced problems in the NFT sector and in terms of price.

Solana [SOL] did not see any positive movement in terms of price over the last few days. However, metrics suggest that SOL may still have more to offer.

Solana continues to grow

SOL emerged as a prominent leader in the Q4 market rally, concluding the year with a remarkable market cap of $43.8 billion, reflecting a staggering 423% quarter-over-quarter (QoQ) surge and an impressive 1,106% year-over-year (YoY) increase.

During Q4, SOL outpaced ADA, USDC, and XRP in market cap.

the @MessariCrypto Q4 state of smart contract platforms report looks at 10 top networks across 13 metrics.@solana led QoQ growth in 6 of the metrics, including… pic.twitter.com/1TUZiT7W3v

— Peter Horton (@ph0rt0n) January 18, 2024

Solana’s DeFi Total Value Locked (TVL) exhibited growth, soaring by 303% and reaching $1.5 billion. This surge was propelled by strategic points programs and airdrops.

Protocols such as MarginFi and Jito contributed massively to this unprecedented surge in TVL.

MarginFi, experienced an extraordinary 1,404% QoQ TVL growth, surging from the sixth-largest to the top Solana DeFi protocol.

Notably, its TVL started at a modest $3.2 million when it introduced the points program on the 3rd of July.

Additionally, Jito’s airdrop also contributed to Solana’s growth. The protocol distributed 90 million JTO to fewer than 10,000 wallets, with the minimum airdrop amount set at around $10,000.

Source: Messari

Moreover, the network’s daily DeFi volume surpassed Ethereum’s for the first time, peaking at $2.6 billion on 22nd December.

Overall, Solana’s average daily DeFi volume experienced an extraordinary 961% QoQ surge, reaching $416 million. The surge was fueled by memecoin trading and the wealth effect generated by the JTO airdrop.

Issues in the NFT space

However, things were not going well for Solana across all sectors. In the NFT space, there was a massive decline in interest observed in the Solana blue-chip index. This meant that the accumulation of popular Solana NFT collections had started to fall.

Source: Solana Floor

This could be an indicator that not all is well in Solana’s ecosystem and other factors can impact the popularity of Solana’s ecosystem negatively.

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

Coming to the SOL token, it was trading at $93.94 at press time and its price had fallen by 6.68% in the last 24 hours.

The volume at which SOL had been trading at had also fallen during this period.

Source: Santiment