Solana TVL sees sharp decline, reaches bottom in 2022
As Solana’s price hit new lows near $54, the total locked value (TVL) for the token also fell to an all-time low. According to data from Defi Lamathe token’s TVL has been steadily declining since November 2021. In that month, it hit a record high of $15 billion, but then lost momentum, dropping to $4.34 billion.
Solana’s TVL continued to plummet into the third week of May as bearish trends in this market led to declining investor interest.
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With its price struggling to gain a foothold, it has been one of the best performing crypto projects in recent months. However, the research shows that Solana has lost 60% of its total value since the first day of 2022, caught in a bear market pattern.
Specifically, on January 1, Solana’s TVL was about $11.22 billion, but by May 16 it had fallen to about $4.38 billion.
Solana is a blockchain that helps create user-friendly applications that are highly scalable. As the fastest growing ecosystem in the crypto finance space, Solana has thousands of projects under Web3, non-fungible tokens (NFTs), and DeFi.
Reason Behind the Decline in Solana Total Value Locked
This week, the Solana TVL hit a new low as the number of decentralized applications (dApps) in its ecosystem plummeted.
For example, the Tulip yield aggregation platform has lost more than 11% of its TVL in the past month. Similarly, Solend’s decentralized lending and borrowing platform is down more than 8% over the same period.
Bitcoin is currently trading below $30,000 with a market cap of $567 billion | Source: BTC/USD price chart of Tradingview.com
With the value of both projects locked up, the Staking platform Marinade Finance and the Decentralized Exchange Protocol (DEX) Serum have lost more than 48% and 42% respectively.
Saber, Raydium, Orca, Atrix, Quarry, Francium and Mango Markets are the other dApps that have caused a drop in overall value.
Solana still holds the fourth position with the blockchain with the most locked-down value. Despite a drop of more than $6 billion in 2022.
Solana still reigns supreme in value locked over Cardano, TRON, Fantom, Polygon, Cronos, Near, Waves, DefiChain, Harmony and Osmosis. However, Ethereum, BNB and AVAX are at the top of their game.
Meta Platforms has announced that Solona is integrating with Instagram. This means that Solona’s non-fungible tokens (NFTs) will be usable on the social media platform. Other platforms named after this integration are Polygon and Ethereum.
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When SOL opened the year, it was priced at $170.31; on January 2, the coin reached its annual high at $179.43. As of May 16, SOL is trading at $55.38 per coin. This means that the price has fallen by 67% since the beginning of the year.
Featured image from Flickr and Tradingview chart