A Nansen analyst recently published a report that delves into the Solana ecosystem, exploring on-chain data, network developments, and other findings.
According to the findings, amid challenges such as network outages and the FTX/Alameda saga, the Solana blockchain shows significant resilience and continuous improvements, achieving 100% uptime so far this year.
Solana’s performance to date
The report shared via an
Solana: past, present and future
We are excited to publish our deep and comprehensive dive into the @solarium ecosystem. @sandraaleow covers catalysts, risks and ecosystem highlights, explores on-chain data, network development and much more
Here are the key findings…
—Nansen (@nansen_ai) October 5, 2023
Monthly transactions associated with Solana have remained fairly stable, while vote transactions have increased considerably. According to Nansen, this growing transaction and TVL demonstrate its potential for active economic activity.
Nansen analyst Sandra also mentioned a couple of Solana solutions. For example, its commission markets and state compressions have addressed important issues across its technology stack.
State compression reduced the cost of minting NFTs by more than 2,000 times. Before this state compression, minting one million NFTs on the Solana network would cost the creator about $253,000. The compression caused a dramatic drop in cost to just $113.
The Nansen analyst compared Solana to minting one million NFTs on ethereum or Polygon, which can cost more than $33.6 million and $32.8 thousand, respectively.
The rapid expansion of liquid betting within the Solana network, led by Marinade Finance, Lido Finance and Jito_sol, was prominently emphasized in the discussion. However, despite the substantial growth of Solana’s liquid staking protocols, the report acknowledges that there is still significant potential for further expansion, as only approximately 3% of staked SOL are currently allocated to these protocols.
Additionally, analysts cited growing interest in enterprise adoption and payment pathways following Visa’s integration of USDC settlement on the Solana blockchain. The Visa USDC integration was primarily aimed at providing faster finality and high performance at virtually negligible costs to users.
One of the tweets also mentioned potential growth factors, saying:
“Other potential tailwinds for Solana include increased enterprise adoption, success in implementing Firedancer’s vision, and the growth of consumer-facing applications that take advantage of Solana.”
The report also notes that Solana has been attracting attention from consumer-facing applications. He praised Solana’s technological feats, potential partnerships and infrastructure applications, all indicative of its promise.
Potential challenges on the horizon
After highlighting some of these positives for Solana, the report noted that challenges still exist, including the uncertainty of FTX/Alameda’s SOL holdings. Negative news about these holdings will be a temporary barrier to SOL’s growth.
Still, around 71.8 million SOL, equivalent to $1.16 billion, are locked in FTX – around 17% of SOL’s circulating supply and 13% of its total supply. The outcome of these SOL tokens and their eventual launch will potentially affect the future of the token.
According to recent reports, around 9.1 million SOL belonging to Alameda Research were left unstaked, causing the current price drop.
Solana’s price performance was also possibly another challenge, as the assets traded in the red throughout the year. However, a look at the price since January suggests that SOL started the year trading around $10 and is currently sitting above $20.
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