Solana’s DeFi space is suffering, but here’s the unexpected NFT twist
- Solana’s DeFi activity is slowing, but the NFT market shows a promising future.
- Following the broader market, the SOL token is facing selling pressure.
Solana’s hold on the DeFi space continued to decline. Despite the overall market seeing an improvement, Solana underperformed in the DeFi market.
Well, the drop in DeFi activity could signal a general decline in interest in Solana’s ecosystem.
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Solana’s DeFi(ance)
In particular, Solana’s total TVL has remained volatile over the past three months, which was a cause for concern.
The declining dApp activity was one of the reasons behind the same. Popular dApps such as Raydium and Saber observed a drop in the number of unique active wallets on the network.
This indicated that users were not very engaged in Solana’s DeFi applications.
Source: Defi Llama
Another indicator of Solana’s declining DeFi activity was the declining number of DEX wallets on the network.
A DEX or decentralized exchange is a platform that allows users to trade cryptocurrencies without intermediaries.
Well, if this trend continues, it will be difficult for Solana to compete with other DeFi ecosystems in the market.
Source: Dune Analytics
However, despite the declining DeFi activity, Solana’s NFT growth showed promise. Compared to the DeFi space, Solana’s NFT market was buzzing with increased user interest.
According to Delphi Digital’s data, Solana’s NFT market share has increased from 6% to 14% over the past few months.
NFTs come to the rescue
NFT volume remained consistent despite a price drop, which was a positive sign for Solana’s ecosystem.
Source: Delphi Digital
Another positive news for the ecosystem was the increasing number of buyers. Interestingly, the number of buyers exceeded number of sellers.
That said, the overall volume of SOL fell, and price volatility increased. According to Santiment’s data, the total volume of the SOL token fell from 725.53 million to 353 million in the last month.
Read Solana’s price estimate 2023-2024
It is here to note that the increasing volatility would disincentivize risk-averse investors from buying the SOL token.
Source: Sentiment
It is important for Solana to find a way to sustain its DeFi activity while leveraging NFT growth to ensure the long-term success of its ecosystem.
