Solana’s TVL Performance and Shift in Focus
Solana’s performance has been a mixed bag recently, falling short of the once-hyped “Ethereum killer” status. Its DeFi performance, in particular, has been lackluster, evident from its Total Value Locked (TVL).
Solana’s current TVL stands at $268.94 million, far below its historic high of $10.03 billion in November 2021. In contrast, other leading PoS networks like Cardano (ADA) and Ethereum have seen significant TVL gains over the past few months.
A recent analysis by Messari highlighted that the focus on consumer applications contributed to the sluggish TVL growth. The shift away from DeFi protocols may explain the decline in TVL.
Importance of DeFi and User Retention
Emphasizing DeFi could be a strategic approach for blockchain networks to attract and retain users. While Solana has been onboarding users through consumer applications, it has faced challenges in retaining them.
The report suggests that improving user retention could be achieved by creating more compelling applications with better user experiences. However, this focus may not be conducive to TVL growth, but it is a positive step for user adoption.
Untapped Potential: Solana’s Focus on Consumer Applications
Solana’s focus on consumer applications highlights the untapped global potential that could expand in the future. The network has already witnessed growth in key areas as a result of this approach, with robust development activity related to consumer applications.
On-chain data supports this observation, showing consistent development activity over the last four weeks.
Additionally, Solana shifted its focus to a major area attracting individual consumers in the blockchain space – NFT trading activity, as indicated by the Messari report.
Surge in NFT Trading Activity
NFT trading activity on Solana started slow from January to mid-March. However, from the second half of March to the end of May, it experienced a remarkable surge.
Considering these findings, it is evident that the consumer applications segment is off to a busy start. As the market is still in its early stages of adoption, there is significant potential for growth. However, whether deviating from DeFi will prove advantageous in the long run remains uncertain.