After a turbulent 2022 due to macroeconomic headwinds, Solana’s performance improved significantly in the first quarter of the year. Data suggested that its market cap grew by over 118% QoQ along with the broader market.
In addition, several ecosystem developments fueled fee payer and transaction activity during Q1.
Q1 performance of Solana
Solana’s network outage had previously sparked talks about possible bankruptcy. But after upgrades like QUIC, priority fee (local fee market), and stake-weighted quality of service (QOS), its performance stagnated. In Q1, the Layer One blockchain network saw significant growth in the DeFi, NFTs, and GameFi verticals.
as per latest messari reportsNet value closed at Solana, denominated in USD, grew 23.5% Q-o-Q. However, TVL denominated in SOL was down 40.7% during the same period, indicating that “increase in asset value in USD versus new capital inflows drives TVL.”
Liquid Staking Derivatives (LSD) continued to support the Solana ecosystem, with Marinade Finance, Lido, Zito and JPool increasing their TVL by 100% or more during the quarter. These four LSDs also managed to make the top 20 by TVL.
Other protocols, such as Orca, Radium, and Solend, increased their TVLs in tandem with the massive market rebound.
A similar trend was also observed in Solana’s NFT ecosystem. Data from Messari showed that the total number of daily new NFTs increased from 2.6 million to 2.9 million QoQ, representing an increase of nearly 12%. The NFT sales volume in the secondary market was up by about 36% in USD terms.
This is in stark contrast to DeFi, as sales denominated in SOL were up 20% before skyrocketing, essentially indicating that “the selling activity was not derived purely from asset price growth in USD.”
Meanwhile, unique buyers outnumbered unique sellers during the first quarter. The total number of buyers was 889,000, while the number of sellers was recorded at 887,000.
FTX explosion after
Solana’s strong ties with Sam Bankman-Fried’s crypto empire – which invested in nine of his projects from December 2020 to March 2022 – turned out to be a disaster for the network. This ignited rumors of a developer exodus.
But this year with more and more applications being launched, their user base also increased. This trend helped to scale up and stabilize active programs in the Solana ecosystem. As such, there were 58,000 unique active events in Q1 2022, which has increased to 96,000 in Q1 2023.
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source: cryptopotato.com
