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Solana TVL Rises 12% in Seven Days, All Top Protocols Gain

Last Updated May 16, 2024 1:24 PM
Shraddha Sharma
Last Updated May 16, 2024 1:24 PM

Key Takeaways

  • Solana’s TVL increased by 12%, reaching $4.5b.
  • All top Solana protocols reported substantial gains.
  • Institutional interest in Solana is on the rise, further driving TVL growth.
  • Meme coins have significantly contributed to the surge in new tokens on Solana.

Solana has experienced a rise in its Total Value Locked (TVL), with a 12% increase over the past seven days ending May 16. The surge reflects the growing adoption of Solana’s decentralized finance (DeFi) protocols, coupled with renewed institutional interest and improved network performance. 

Solana’s DeFi Performance and TVL Rise

Over the past seven days until May 16, Solana has demonstrated growth in its Total Value Locked (TVL). It has surged by 12% to reach $4.5b. 

Solana Protocol TVLs on Solscan
Solana Defi Dashboard | Source: Solscan

According  to DefiLlamaSolana boasts 139 active protocols and 841,149 active addresses, an expanding user base behind Ethereum, Tron, and BSC. The platform’s one-day change stood close to 10%, while the seven-day change was 12% in terms of TVL. The one-month change reached 30%, indicating growth across different timeframes.

The rise of DeFi protocols on Solana is a major driver of the increase in TVL. Leading protocols such as Jito, Marinade, Kamino, Raydium, Sanctum, marginfi, and BlazeStake have all reported substantial gains in TVL over one month. Jito, a liquid staking protocol, saw its TVL increase by 14% over the past week to $1.7b. 

Marinade, another liquid staking protocol, reported a 12% increase, reaching $1.6b. Kamino’s TVL grew by 8% to $1.17b, while Raydium, a decentralized exchange (DEX), experienced a staggering 53% increase in TVL to $881m.

On May 15, Robinhood announced new features for its European customers and included the ability to stake Solana (SOL) directly through the app.

The news  was positive for Solana TVL as it will allow users to earn rewards with the option to unstake at any time. In addition, Infinex, a new decentralized platform for trading perpetual contracts, has announced  that it has now incorporated Solana into its system.

Increasing Interest and Ethereum Competition

Renewed interest from institutional investors could play a role in boosting confidence in Solana. This increased confidence can lead to more investment in DeFi protocols on the platform, further inflating TVL. 

CoinShares data  shows that Solana had positive inflows over the past week, with $5.9m flowing into the asset. This contributed to its month-to-date (MTD) inflows of $6.2m and year-to-date (YTD) inflows of $17m. The asset under management (AUM) for Solana stands at $1.186b, making its market presence crucial. 

In the past, Solana has faced criticism for network congestion and outages. However, recent improvements have enhanced user activity. Since April, Solana has seen a surge in the creation of new tokens daily, with many meme coins like Dogewifhat (WIF) and Bonk (BONK) posting gains. 

 Meanwhile, compared to Ethereum, Solana is seen as a lower transaction fee alternative, making it an attractive option for users and developers. Recently, Solana surpassed Ethereum in daily economic value, which includes transaction fees and miner extractable value. 

According  to on-chain analyst Leon Waidmann, Solana surpassed Ethereum only in comparison to the mainchain. 

Waidmann emphasized the importance of considering the broader Ethereum ecosystem, including Layer 2 solutions, making the initial ‘comparison flawed‘. 

Solana Activity Strong 

Solana’s recent 12% rise in TVL over the past week explains its growing strength in network activity and investor interest. All top protocols on Solana have reported gains, coupled with the rise of meme coins and other tokens, which has pumped the Solana surge. 

It seems like Solana is addressing the drawbacks from its past network blackouts, offering a compelling alternative to Ethereum in some parameters.

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