The Solana Network (SOL) has seen 26.5% growth in Total Value Locked (TVL) since early 2023, crossing the $259 million mark, despite some reputational dents caused by the FTX collapse and Alameda Research.
Although the current TVL falls short of its all-time high of $10 billion, the growth is seen as a positive sign, considering various network challenges, including outages.
According to the latest CryptoCompare report asset reportSolana’s TVL growth is a “positive sign for the ecosystem” compared to other blockchains, with the exception of Kava.
Kava saw its TVL grow by more than 36.5% in March, compared to growth of 16.5% for Solana and 11.4% for Tron. Binance’s BNB chain saw growth of 6.15% during the same period. By contrast, Fantom and Avalanche experienced almost negligible growth in their TVL, with only a slight 0.53% and 0.91% increase in TVL, respectively.
Diverse ecosystem fuels Solana’s growth
Solana’s diverse ecosystem, including DeFi and NFT offerings like Claynosaurz, Pixel Boy, and Moo Doo, has been a major driver of this growth.
Solana competes with Ethereum in the smart contract hub market and has established itself as one of the most adaptable Layer 1 protocols. The company is also diversifying its core business by launching its own crypto phone, the Saga, in Q1 2023, making it the first Layer 1 blockchain to do so.
However, Solana’s team has faced concerns regarding network reliability, including a significant 18-hour outage in February 2023. To improve network stability, one-third of the lead engineers will focus on improve the network during 2023, with the support of six point strategy to refine the network upgrade process.
Institutional investors focus on altcoins, including SOL
Institutional investors are turning away from cryptocurrency investment products that offer exposure to dominant digital assets like bitcoin (BTC) and ethereum (ETH). However, they are instead betting on products that expose them to altcoins, such as XRP, solana (SOL), litecoin (LTC), and polygon (MATIC).
Despite the BTC price surge, institutional investors abandoned BTC-related products, leading to a $113 million outflow last week. By contrast, XRP products saw $400,000 in inflows, and products with exposure to SOL, MATIC, and LTC saw $200,000 in inflows each. Ethereum products had outflows of $13 million last week.
