Bybit, one of the leading cryptocurrency exchanges, recently published a report analyzing the Solana network performance in Q1/2022.
The analysis gives in-depth insights into the network’s overall development, DeFi as well as NFT ecosystem. The results are interesting to say the least.
Transactions Are On The Rise
After reaching the ATH in November 2021, Solana has continued its rise with trade volume increasing more than 16 times in the first quarter of 2022 compared to the same period in 2021.
The blockchain not only outperformed itself but also stepped beyond established competing networks.
In particular, Magic Eden increased from less than 100k to over 500k active unique addresses engaging with dApp projects in less than a month. Following Magic Eden, Serum, Raydium, and Mango all grew steadily.
Big Boost For Serum
In terms of daily transactions, Serum also gained the lead in the latter stages of the quarter, outperforming other chains such as BNB Chain, Fantom, and Polygon.
Data show that MEV bots and whales have a significant impact on SOL price movements during bull and bear markets. The late arrival of whales at the sale party may contribute to the inflation of selling pressure.
Overall, the Solana ecosystem has reached a number of significant milestones. Key metrics represent the network’s growth rate in terms of daily transaction volume and network activity.
DeFi and NFTs
The number of projects built on the Solana blockchain has expanded significantly.
Solana had thousands of projects developed by the end of Q1/2022, up from just a few initiatives at the start of 2021. This count of projects covers a wide range of topics, with a particular focus on DeFi, NFT, and Web3.
Solana’s Total Value Locked (TVL) has continued to fall as a result of a market-wide bearish trend and a gradual decline in investor interest in decentralized finance.
Top decentralized platforms on Solana, such as Solend, Tulip, Marinade Finance, Serum, and Raydium, have witnessed massive selldowns, according to DeFiLlama. Raydium, Atrix, Orca, Quarry, Francium, Saber, and Mango Markets are among the other underperforming apps.
A Mixed Market
While DeFi has seen significant drops, the non-fungible tokens (NFT) ecosystem is a key point of interest of the entire Solana network.
Within 30 days, Dappradar analyzed OpenSea and Magic Eden statistics, and Magic Eden transactions totaled 9.2 million, whereas OpenSea transactions totaled 1.67 million. Magic Eden volume increased by 76.13% as well.
Although Solana’s reported volume ($779.22 million) is significantly less than Ethereum’s ($2.29 billion), the blockchain has demonstrated its ability to outperform the top DeFi and NFT ecosystem.
Ethereum is Facing Challenges
Currently, Ethereum powers around 95% of NFT projects. Therefore, when investors search for the NFT market, they frequently turn to platforms that enable Ethereum NFT, such as OpenSea, Rarible, or Nifty Gateway.
However, Ethereum’s dominance is threatened by the quick emergence of alternative Ethereum killers.
The network will see a massive backlog of transactions as Ethereum’s activity expands dramatically, resulting in a jump in transaction fees. This could have an impact on the amount of users who can afford to mint NFTs.
As a result, NFT creators and collectors must look for alternative blockchains with faster throughput, scalability, and reduced gas prices. Solana is the best solution at the moment, as it uses many cryptographic approaches to scale the network.
While Solana’s ecosystem is not as large as Ethereum’s, it is expanding. With more advantages, and more development, it looks like Ethereum may face a serious challenge from platforms like Solana.
In reality, Solana’s user base has grown at a far quicker rate since the beginning of 2022, and many analysts believe it will eventually exceed Ethereum.