The curious case of Solana's declining TVL
SOL was up by more than 1.5% at press time, but its social volume dropped.
Solana’s [SOL] DeFi ecosystem has been flourishing since the beginning of 2023. Inasmuch, its TVL registered consistent growth for months. However, the latest data highlighted a halt in the blockchain’s growth spree.
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Is Solana’s DeFi ecosystem in peril?
DeFiLlama’s data pointed out that the blockchain’s TVL has been on a growing trend since the beginning of this year. At press time, Solana’s TVL stood at $1.059 billion.
However, this trend changed in the last seven days. Solana Daily, a popular X (formerly Twitter) handle that posts updates related to the Solana ecosystem, revealed that almost all the projects in the ecosystem experienced a 2-digit loss in TVL growth.
As per the tweet, top projects like Marinade Finance witnessed a 6% drop in TVL. Interestingly, UXD was one of the few projects that continued to grow in the last seven days, contributing more than $14 million to the ecosystem.
SOLANA TVL STATUS The Solana ecosystem has witnessed the withdrawal of money flow in the last 7 days. Almost all the projects in the ecosystem experienced 2-digit-loss in TVL growth. #tvl #status pic.twitter.com/R5rLkBoujc — Solana Daily (@solana_daily) September 6, 2023
While the DeFi ecosystem had some concerns to address, Solana’s NFT space continued to grow, per CryptoSlam’s data. Notably, the number of Solana NFT traders increased by more than 24% in the last seven days.
Additionally, SOL’s total NFT trade counts and trade volume in USD also spiked in the same time period.
Moreover, Solana Daily highlighted the top NFT collections on the blockchain. As per the tweet, Madlads, Meegos, and Famous Fox were the most traded NFT collections. Solcasino and Photo Finish completed the top 5 of the list.
SOL investors are rejoicing
Amidst this, SOL’s price action turned bullish, as its daily and weekly charts were green. According to CoinMarketCap, SOL was up by more than 1.4% in the last 24 hours. At press time, it was trading at $19.90 with a market capitalization of over $8.1 billion.
The recent uptick was also accompanied by a rise in SOL’s Open Interest. Generally, a hike in the metric suggested that the press time price trend might continue.
However, the price uptick did not help improve the token’s social metrics. After spiking on 5 September, Solana’s social volume declined. The same trend was also seen in its weighted sentiment graph, reflecting less popularity of the token.