Journalist
Posted:
- Solana’s protocols leveraged points programs and collaborations to increase DeFi engagement.
- Despite TVL growth, DEX volumes declined; Visa partnership sparked optimism.
Solana [SOL] has recently encountered difficulties in gaining a strong foothold in the fiercely competitive DeFi sector. To address this, the network implemented several strategies to attract an expanded user base, especially within the DeFi world.
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New incentives for users
A key strategy has been the adoption of points programs by several Solana DeFi protocols, such as MarginFi, Cypher, Solend, and the latest entrant, Jito.
These programs aimed to quantify and reward user contributions to the protocols, incentivizing users to actively participate in Solana’s DeFi offering.
Source: Delphi Digital
More improvements are needed
Another indicator of a potential positive future for Solana would be the improving TVL on the Solana network. According to Artemis data, Solana’s TVL has increased from 296 million to 313.75 million in recent weeks.
However, despite a recent increase in Total Value Locked (TVL) within the Solana ecosystem, there has been a noticeable decline in Decentralized Exchange (DEX) volumes.
These volumes play a crucial role in the vitality of a DeFi network, and the decline in DEX activity raised concerns about the health and future prospects of Solana’s DeFi landscape.
Source: Artemis
Data from Token Terminal further highlighted these challenges, revealing a 14.5% reduction in fees and revenue generated by the Solana protocol. This decline underscored the need for additional development and strategies to increase user engagement and adoption in Solana’s DeFi space.
Stablecoin volumes are increasing
However, Solana’s partnership with Visa brought a new wave of optimism to the ecosystem. This strategic partnership resulted in a significant increase in USDC activity on Solana, leading to a substantial increase in daily transfer volumes.
Moreover, it increased the involvement of large investors, also known as whales. This partnership positioned Solana to strengthen its position in the DeFi sector, offer efficient payment solutions and attract a broader user base.
Solana and Visa announced their blockchain alliance a few weeks ago
I gathered information on the chain effect, specifically USDC activity, in relation to the news
🔥Even if the market is in a bear market, the impact of news is visible.
👇🧵 https://t.co/pnQ2LSIP6I pic.twitter.com/9Cslp9nReF
— h4wk (@h4wk10) September 25, 2023
Realistic or not, here is SOL’s market cap in terms of BTC
Despite these commendable efforts and collaborations, Solana’s native token, SOL, faced a price drop over the past month. SOL was trading at $19,337 at the time of writing.
Nevertheless, SOL’s increased trading volume indicated continued interest and activity within the network.
Source: Santiment