Daniel, Jan 2022
Previously, we published 9 Reasons Why Solana Won’t Survive the Bear Market.
When looking at the data, there is a good argument that Solana was severely overbought during 2021/2022 and that the network does not have the projects, TVL or users to sustain itself through a prolonged bear market. Its collapse is simply more severe, and its ecosystem is shakier than other L1s.
To summarize:
- Solana has 0.7% market share among the top 10 chains by TVL
- The TVL of Solana has collapsed by 96% YoY
- Almost all of Solana’s value is in the DeFi sector
- Yield projects on Solana have been almost entirely wiped out
- Once the most promising project on Solana, STEPN’s protocol token GST crashed by 99.9 percent in 2022
- As of the start of 2023, SOL was down about 96% from it’s ATL
- Magic Eden, the marketplace for Solana NFTs, had just $19M in trading volume in January
- By the end of 2022, Polygon overtook Solana for the number of NFT transactions
- Marinade Finance has roughly 40% percent of Solana’s total TVL
You can read the entire article here.
On the other hand, Solana is a high-performance blockchain platform that offers several advantages over other first-generation blockchain ecosystems. Specifically, its high TPS and low latency make the chain ideal for building DeFi protocols, exchanges, and applications that require fast and reliable transaction processing.
For the other side of the argument, here are 5 reasons why Solana will survive the bear market.
1.Solana is home to the most popular Move-to-Earn GameFi projects
Move-to-Earn, pioneered by STEPN, was the last major project category trend of the bull market. It remains an innovative use of blockchain and DeFi to create a product that many traditional Web 2.0 developers have tried and failed. Both major M2E projects — STEPN and Walken — are on Solana.
*Source: Footprint Analytics — *2022 Game Ranking
2.Solana has the 2nd largest number of NFT protocols
Even though Solana’s NFT marketplaces lack volume, this figure — and the gap appears to be widening — indicates and active developer community on the chain.
*Source: Footprint Analytics — *2022: Number of NFT Protocols by Chains
3.In 2022, Solana had 34% of the total market share of NFT transactions
In 2021, it had just 6% of all NFT transactions, while Polygon had 36.9%.
*Source: Footprint Analytics — *2022 Market Share of Transactions by Chain
4.Magic Eden has the 2nd highest number of daily active users after OpenSea by a significant margin
As seen from the chart below, it has also shown a strong upwards trajectory in recent months. While Magic Eden does not have nearly the amount of volume that Ethereum marketplaces do, Magic Eden’s high number of users indicate active NFT community on Solana.
*Source: Footprint Analytics — *2022 Marketplace Daily Active User 2
5.Large standalone IOT-focused blockchains are migrating to Solana
Helium is the most prominent example of this. Solana is almost the only chain with sufficient TPS for their use cases.
This piece is contributed by Footprint Analytics community.
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