Ethereum’s Dominance and Emerging Contenders
Ethereum currently stands as the leader in the DeFi and smart contract sectors in terms of Total Value Locked (TVL). However, the landscape is evolving, with other blockchain networks like Solana, Avalanche, and Polkadot vying for a place in the spotlight.
Solana’s Impressive TVL Surge
Solana, in particular, has been making significant strides in terms of its Total Value Locked (TVL). According to on-chain data from Messari, Solana has outperformed its competitors by achieving a remarkable 14% increase in TVL over the course of the previous month.
Solana’s TVL Growth
The overall TVL of the DeFi sector has experienced a decline since November 2022, affecting Solana as well. However, Solana’s recent growth can be attributed in large part to the rise in TVL within staking and yield-based protocols built on the Solana blockchain.
TVL, a crucial metric in the decentralized finance (DeFi) space, measures the total assets locked in a protocol. On-chain reports indicate that Solana’s TVL expanded by $45 million in July, reflecting a substantial 14.4% growth.
Solana’s TVL Position
DeFi Llama data reveals that Solana currently holds the 9th position in terms of TVL among all blockchain networks. The platform’s TVL has surged to $320.07 million, a remarkable increase from its initial TVL of $205.11 million at the beginning of the year.
Despite Ethereum’s leading TVL of $23.3 billion, the platform experienced a 13% decrease in TVL over the past month. Similarly, Binance Smart Chain (BSC) faced a monthly decline of 4.6% in TVL, bringing its total to $3.3 billion.
Prospects for Solana in 2023
Solana’s TVL growth is not only attributed to protocol TVL increases but also to a surge in its price in early July. Data from Coinmarketcap indicates that Solana’s price rose from $18.9 on July 1 to $27.4 on July 16, leading to a market cap of $11.81 billion.
Solana, alongside Bitcoin, spearheaded a crypto market surge during this period. Consequently, the spike in Solana’s price directly impacted the total assets locked in DeFi protocols on the network.
However, despite the recent TVL growth, user activity on the Solana network decreased towards the end of the month. The platform’s market cap also declined to $9.7 billion by the close of July, highlighting the inherent volatility of the cryptocurrency market.
As of the time of writing, Solana is trading at $24.85, marking a 14.93% increase over the past month. Experts speculate that Solana could potentially exceed $30 by the end of the year.