Key Takeaways:
Solana’s native token, Sol (Sol), dropped by 10% following a sharp decline at the level of $ 185 on May 23. The current $ 167 mark was the lowest in a week, leading entrepreneurs to ask the reasons behind the recent denial and if Sol could visit the $ 142 support level again.
Despite the price collapse, Sol holders can take comfort in Solana’s position as the second largest network in terms of the total amount locked (TVL). However, Ethereum’s dominance remains undoubtedly, supported by a wide layer-2 ecosystem that offers low fees and high scalability.
Solana’s current $ 11 billion on TVL marks a 14% increase in the last month, though Ethereum has posted even stronger growth. Known development in Solana includes 48% growth in Raydium deposits and a 28% increase in marinade TVL. However, growth is more moderate to other decentralized applications (DAPPS) such as Jupiter, Kamino, and Drift.
Solana volumes and fees exceed Ethereum
The bulls remain confident that Solana’s position is safe, thanks to the great integration of web3 applications with mobile wallets. In the past 30 days, solana’s trading volume Decentralized exchange (DEX) reached $ 94.8 billion, exceeding $ 64.8 billion in onchain activity, according to data from Defillama.
The Sol Bears highlights the increase in Dex’s activity on Ethereum’s layer-2 ecosystem, which has reached $ 59.2 billion in the last 30 days. While this trend is undeniable, it is not translated to a higher fee. Ethereum allows rollups to combine data into blobs, reducing costs, while Solana gets more value from onchain activity.
This contrast is evident in fee data: more than 30 days, Solana generated $ 48.7 million in fees, compared to Ethereum’s $ 36.9 million, despite Ethereum with significantly larger deposit base. Meanwhile, the BNB chain, despite a recent uprising, is behind $ 15.1 million in fees, making it easier for projects that artificially drop volume numbers.
Another factor weighing the investor’s sentiment is the expectation Unlocking 3.55 million sol Between June and August, costing about $ 600 million at current prices. Analysts note that most of these tokens are obtained from the bankruptcy FTX/Alameda Estate around $ 64, which potentially limits the reverse of the token.
Although Solana offers an 8%yield for validators, which is above 3%of Ether, its supply expands at an annual rate of 5.2%, according to stakingRewards. As a result, Sol’s net staking return is less than the produce offered by many dapps in Stablecoin deposits.
Sol is suffering from MEV and denying interest in memecoins
The high throughput of the Solana network has trade-offs, especially about validator incentives linked to MEV (maximum amount available). Validators may increase their profits by re -adjusting transactions, which will open the door Sandwich attack and skills running in front that are harmful to regular traders. According to Dan Robinson, a paradigm researcher, Mev’s “biggest problem is” Solana’s biggest problem.
Entrepreneurs also questioned the long-term possibility of Solana-based memeins after several posted sharp weekly refusions. Official Trump (Trump) fell 24%, while Fartcoin and PopCat lost 20%, and Pudgy Penguins (Penguin) fell 17%over the past seven days. A prolonged collapse in Dex’s activity will further force Sol’s performance.
Despite these risks, Solana’s strong performance in both trading volume and total deposits suggests that there is no immediate underperformance signing related to the wider Altcoin market. However, token unlocks that have been scheduled in the coming months will significantly reduce the odds of SOL’s reclaiming of $ 200.
This article is for general information purposes and is not intended to be and should not be done as legal or investment advice. The views, attitudes, and opinions expressed here are unique and do not necessarily reflect or represent the views and opinions of the cointelegraph.
