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When it comes to scaling the network, the price doesn’t necessarily tell the whole story. Apparently, Solana is experiencing a secret growth – and this is in the midst of a 46% decline against BTC.
A 32-page Report according to ByBit, the Solana ecosystem has experienced strong growth in the second quarter of 2022, driven by the strong performance of GameFi and DAOs.
There was an increase in DAO activity, continued volatility in NFT markets, strong interaction with GameFi, and a decrease in DeFi market share during the quarter.
Solana: not without problems
Although there has been solid growth in parts of the network, there have been problems recently. Specifically: two major network outages. The upgrade of Solana however, it seems to have a positive effect, as stated in the report:
“Network upgrades in the late 2nd quarter have shown significant improvements in transaction processing and reliability.“
In addition, the report highlights the problems with Solend, Slope Finance, Crema, Nirvana and Saga as examples of network security that need to be drastically improved. Some events did not occur until the beginning of the third quarter, but were taken into account due to their potential impact on Solana’s future growth.
The price of $SOL has fallen from a high of $146 in the first quarter to a low of $26 in the second quarter, in parallel with a broader market sell-off. However, $SOL has also fallen by 46% against Bitcoin. This suggests that the surrender of Solana in a way, it was independent of the overall market.
There are a lot of positive things to report
However, in terms of on-chain activity, the positive statistics support the report’s assumption that Solana is experiencing network growth regardless of price pressure. The daily active programs and the number of validators are steadily increasing, as shown below.
The number of active users interacting with NFTs on Solana is also good compared to OpenSea. The number of transactions on Magic Eden is more than five times as high as on OpenSea. And this is despite the fact that the value of transactions in both ecosystems is similar.
There has also been an increase in DAO activities. The report argues that “Solana has caught up to Ethereum with its number of DAOs”.
“As an overview, the Realms DAO creation tool has registered a significant increase in DAOs on Solana to over 800+ DAOs at the time of writing, compared to 100+ in January 2022.”
DAOs on Solana have grown from 1,750 to about 2,500 from March to June 2022, “which reveals a thriving DAO landscape on Solana”. The report uses data on Solana multi-Sig wallets to determine the increase in DAO activity.
What does the Solana course do?
Along with the drop in the token price of $SOL, the total value locked in Solana DeFi has dropped drastically – from $8 billion in Q1 to just $2.5 billion in Q2.
Even though the use of NFT marketplaces is stable, some popular NFT projects such as STEPN are experiencing a migration of users. The value of STEPN’s GST token has decreased by 99.5% over the course of 2022 due to a sharp increase in the number of players and limited use of the token in the game.
It should be noted that within GameFi as a whole, Solana has experienced an increase in market share compared to other chains. The report attributes this to “strong user statistics from Gameta, Solana is a top game blockchain as of Q2”.
The report concludes by noting that concerns about the instability of the Solana network remain. However, it is “optimistic that the new upgrades announced during the quarter will improve the stability of the network and reduce the possibility of failures in the future”.
Proof of text: Cryptoslate
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