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When it comes to network scaling, price doesn’t necessarily tell the whole story. Apparently, Solana has stealthy growth amid a 46% drop against BTC.
According to a 32-page report by ByBit, the Solana ecosystem has seen strong growth in the second quarter of 2022, driven by the strong performance of GameFi and DAO.
There was a boom in DAO activity, continued volatility in NFT markets, heavy interaction with GameFi, and a decline in DeFi market share during the quarter.
Solana: not without problems
While parts of the network have seen strong growth, it has struggled recently. Specifically: with two major network failures. Solana’s upgrade, however, appears to be having a positive impact, as the report states:
“Network upgrades in late Q2 showed significant improvements in transaction processing and reliability.”
In addition, the report highlights the issues of Solend, Slope Finance, Crema, Nirvana, and Saga as examples of network security that needs to be greatly improved. Several events only occurred early in the third quarter but were included because of their potential impact on Solana’s future growth.
$SOL fell from a high of $146 in Q1 to a low of $26 in Q2, along with a broader sell-off in the market. However, $SOL is also down 46% against Bitcoin. This suggests that Solana’s capitalization was somewhat independent of the wider market.
There are many positive things to report
However, in terms of on-chain activity, the positive stats support the report’s assumption that Solana is seeing network growth despite pricing pressures. The daily active programs and the number of collectors are steadily increasing as shown below.
There is also a good comparison between the number of active users interacting with NFTs on Solana and OpenSea. The number of transactions on Magic Eden is more than five times higher than on OpenSea. And this despite the fact that the value of transactions in both ecosystems is similar.
DAO activity also increased. The report claims that “Solana has overtaken Ethereum in its DAO numbers.”
“As an overview, the Realms DAO creation tool on Solana has grown significantly to over 800+ DAOs at the time of writing, compared to 100+ in January 2022.”
DAO on Solana grew from 1,750 to about 2,500 from March to June 2022, “revealing the successful landscape of DAO on Solana.” The report uses Solana multi-sig wallet data to determine the increase in DAO activity.
What does the Solana course do?
Along with the drop in the price of the $SOL token, the total value locked in Solana DeFi has dropped significantly – from $8 billion in Q1 to just $2.5 billion in Q2.
While the use of NFT markets is stable, some popular NFT projects like STEPN are disrupting users. The value of the GST STEPN token dropped by 99.5% during 2022 as the number of players increased and the in-game token has a usage limit.
It should be noted that within GameFi as a whole, Solana has increased market share compared to other chains. This report attributes “strong user stats from Gameta, Solana is a top game blockchain as of Q2.”
The report concludes that there are still concerns about the instability of the Solana network. However, the company is “hopeful that the new upgrades announced during the quarter will improve the stability of the network and reduce the possibility of future outages.”
Text credit: Cryptoslate
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