Journalist
Posted:
- Solana is said to be experimenting with tokenized/synthetic assets on its network.
- The chase could revive Solana’s TVL.
In recent weeks we have seen blockchain networks aggressively push for more development. Solana [SOL] has been quite active in that regard in particular, and the latest announcement highlights its initiative to explore options.
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Solana is reportedly looking for growth opportunities in the synthetic assets segment. The network recently announced that it has published an open-source reference implementation to facilitate its efforts in synthetic assets. This represents an open invitation to developers who may be interested in launching these types of assets with a low-friction approach.
1/ ????Are you a DeFi developer?
Solana Labs has published an open-source reference implementation that developers can use to launch their own synthetic asset platform. We are interested in supporting developers who may want to build on top of this contract: https://t.co/OPhQkDv0q6 pic.twitter.com/LCatCrvzgG— Solana Labs (@solanalabs) September 25, 2023
While Solana has expressed interest in supporting developers to achieve that goal, the announcement has multiple facades. For starters, the open-source nature of the endeavor could facilitate greater developer interest in Solana. An outcome that could potentially boost the growth and development of the Solana ecosystem.
Token Terminal data revealed that the number of Solana core developments has declined over the past three months. Network revenues fell to their lowest point in June, based on a six-month timeline.
Source: TokenTerminal
On the other hand, the development could put Solana on the regulators’ radar. This is because synthetic assets, especially in token form, have previously faced regulatory pressure. As such, it should be interesting to see how Solana will overcome such challenges.
Can Synthetic Assets Rejuvenate Solana’s TVL Growth?
There is no doubt that Solana’s TVL has underperformed since its historic peak. In the meantime, countless projects have overtaken the TVL. However, the underlying mechanisms underlying most tokenization strategies on other networks and protocols often involve liquidity. In most cases, tokenized assets are collateral. If this is the case with Solana, the TVL may recover more quickly.
Nevertheless, Solana’s TVL has managed to regain some upward momentum so far this year compared to the year-to-date lows. According to DeFiLlama, the network had just $210.08 million in TVL as of January 1. The current TVL at the time of writing was $313.27 million.
Source: DeFiLlama
Despite relatively light but notable TVL growth, volume underperformed and appeared lower than at the start of the year. This was with the expectation that there would be large peaks every now and then. Perhaps a testament to the uncertainty that has prevailed recently.
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The slight recovery in Solana’s TVL suggested that the network may need a change in tactics to begin its recovery. The open source invitation to developers to build tokenized assets could turn the tide for Solana.