Solana Q3 Digest: Total Value Locked Hits $5.7 Billion, Ranks Third Among Networks

A recent report from crypto data and research firm Messari has shed light on the performance of the Solana (SOL) ecosystem during the third quarter of 2024. The report highlights a mixture of growth and challenges faced by the blockchain amid broader volatility in the cryptocurrency market during that period.

Solana Stablecoin Market Cap Rises To $3.8 Billion

One of the standout metrics from the report is the growth of Solana’s Total Value Locked (TVL) in decentralized finance (DeFi), which rose by 26% quarter-over-quarter (QoQ) to reach $5.7 billion. 

This growth positioned Solana as the third-largest network in terms of DeFi TVL, surpassing Tron in late September. Notably, the TVL denominated in SOL also increased, growing by 20% QoQ to 37 million SOL.

Kamino emerged as a leading player within the Solana ecosystem, experiencing a 57% growth in TVL, ending the quarter with $1.5 billion and capturing a 26% market share. This surge is attributed to the integration of new tokens, including PayPal’s USD (PYUSD) and jupSOL, which have enhanced the platform’s appeal.

Despite the overall positive trends, decentralized exchange (DEX) volume experienced a slight decline, reflecting a downturn in memecoin trading. Average daily spot DEX volume fell by 10% QoQ to $1.7 billion. 

Per the report, the diminishing interest in memecoins was evident, as only two tokens—WIF and POPCAT—managed to make it into the top ten by trading volume for the quarter.

In contrast, Solana’s stablecoin ecosystem showed resilience, with the market cap for stablecoins growing by 23% QoQ to $3.8 billion, solidifying its rank as the fifth-largest network in this category. 

On the non-fungible token (NFT) front, however, the performance was less favorable. Average daily NFT volume fell by 27% QoQ to $2.5 million, with Magic Eden maintaining a dominant market share despite experiencing a 44% decline in volume. 

Network Activity Thrives

Despite the challenges, the number of funding rounds for projects within the Solana ecosystem saw a reduction of 37% QoQ, with only 29 projects announcing funding. Yet, the total amount raised soared to $173 million, a 54% increase QoQ and the highest quarterly funding since Q2 2022.

Network activity remained robust, as evidenced by a 109% increase in average daily fee payers, which reached 1.9 million. Additionally, the average daily new fee payers grew by 430% QoQ to 1.3 million, signaling a growing user base. 

The average transaction fee on Solana increased by 6% QoQ to 0.00015 SOL (approximately $0.023), while the median transaction fee dropped by 19% to 0.000008 SOL (around $0.0013). 

As of October 15, Solana’s market capitalization also grew by 5% QoQ, reaching $71 billion and maintaining its position as the fifth-largest cryptocurrency, trailing only Bitcoin, Ethereum, Tether, and Binance Coin. 

However, the Real Economic Value (REV) of Solana, which tracks transaction fees and miner extractable value (MEV) for validators, decreased by 25% QoQ to 1.3 million SOL (approximately $196 million), with 56% of this total coming from transaction fees.

At the time of writing, SOL was trading at $166, down 5% for the seven day period.

Featured image from DALL-E, chart from TradingView.com