Solana
Does THIS threaten the Solana ecosystem? Yes, but here’s why SOL is safe
- Sui Network toppled Solana in terms of transaction activity.
- DEX volumes on the network fell as TVL continued to skyrocket.
Activity on the Solana [SOL] has increased significantly in recent months. However, recently other competitors have appeared to take on the network.
For example, the SUI network recently outperformed Solana in terms of daily transactions.
This indicated that not only was Solana struggling to attract new users and create engagement in its ecosystem, but users were also moving to other networks and ecosystems.
Solana is not really in trouble
However, not all of these transactions are legitimate. In a recent tweet, Artemis clarified that a large number of transactions made on the SUI network were caused by Spam Sui.
For context, the Sui Network has a dApp called Spam Sui which offers a unique “Spam to Earn” concept. Unlike traditional crypto mining, you earn “SPAM” coins simply by sending transactions on the Sui network.
The more transactions you send, the more SPAM you receive.
With a staggering 1 billion SPAM coins created daily, the focus is on generating a high volume of transactions.
Source:
It is therefore difficult to believe that the Sui network will be capable of dethroning Solana in the near future, despite the slowdown in activity on the latter’s network.
State of DeFi
Another factor that could impact the Solana ecosystem would be the state of its DeFi. Notably, DEX (Decentralized Exchange) volumes on the Solana network had declined significantly since March.
Poor DEX performance indicates that users are opting for other networks for trading and exchanging purposes.
Source: Artemis
Despite falling DEX volumes, TVL (Total Value Locked) on the Solana network continued to grow, reaching $4 billion at press time.
Realistic or not, here it is Market capitalization of SOL in terms of ETH
This suggests that even though Solana DEXs have not been able to show positive performance, other sectors have managed to pick up the slack and generate value.
Source: Artemis
Regarding the state of the SOL token, it was observed to be moving mainly sideways. Over the past 24 hours, SOL price increased by 0.55% and was trading at $144.98 at the time of writing.
Source: Santiment