In the first quarter of 2024, Solana became the clear leader thanks to a notable increase in the number of Decentralized Exchange (DEX) and Decentralized Finance (DeFi).
In addition to the notable rise in the DEX and DeFi sectors, Solana’s dominance was further strengthened by its scalability, low transaction fees and robust infrastructure.
The massive increase in DEX volume means a substantial increase in trading activity within the SOL ecosystem. This trend aligns with the broader adoption of DeFi, with Solana establishing itself as a major player in the space.
This remarkable increase is detailed in a new report titled “State of Solana Q1 2024” from on-chain analytics company Messari.
The research shows that the altcoin’s average daily spot DEX volume has increased by more than 300% to $1.5 billion over the past three months.
Solana DEX volume skyrockets
Solana’s DeFi total value locked, a metric representing the total value of cryptocurrency locked within DeFi protocols on a blockchain, increased by more than 200% to nearly $5 billion, placing it fourth among all networks . This indicates growing investor interest in DeFi projects built on Solana.
.@solana has become the home base for private users.
QoQ statistics
– DEX volume ⬆️ 332%
– Turnover ⬆️ 597%
– Total raised in ecosystem ⬆️ 51%
– Market capitalization ⬆️ 97%View the full Q1 report at @ph0rt0n 👇https://t.co/hYA1d2ZPY6 pic.twitter.com/egpv6U9Rl8
— Messari (@MessariCrypto) April 5, 2024
Stablecoin adoption on Solana is increasing
Another bright spot for Solana in the first quarter was the significant growth in the market capitalization of stablecoins, which rose 50% to almost $3 billion. This increase was mainly driven by USDC, the leading stablecoin, whose market capitalization on Solana rose by an impressive 110% to just over $2 billion.
This growth reflects an increase in trust and adoption of stablecoins on the Solana blockchain, which are cryptocurrencies pegged to the value of traditional assets such as the US dollar and provide stability in a volatile market.
SOL market cap currently at $77.5 billion. Chart: TradingView.com
Solana price volatility a concern
Despite the positive indicators, the report also acknowledges some potential drawbacks. While the high trading volume is a positive sign, the fact that meme coins are a significant contributor raises questions about the long-term sustainability of this growth.
Meme coins are often known for their erratic price movements and lack of underlying utility. Their dominance of Solana’s DEX volume could indicate a speculative bubble rather than real growth based on solid projects.
At the time of writing, SOL was trading at $174, reflecting a decline of 12% in the past seven days. This price volatility is a common problem in the cryptocurrency market, and Solana is not immune to it.
Featured image from Pixabay, chart from TradingView
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