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Solana’s performance before the crisis
Solana has had a successful journey since its launch in 2020, climbing the ranks to become the 9th most valuable blockchain project in the market in just one year. August 2021 was a major turning point for the project when it gained popularity in the Non-Fungible Tokens (NFTs) market, thanks to the Degenerate Ape Academy that became the first major NFT project on Solana’s platform. The network offered a more cost-effective alternative to mint NFTs rather than Ethereum, leading to a significant increase in value from around $30 to $75 within the first three weeks of the month.
Solana reached its all-time high in November 2021, with a value of nearly $260, during the peak of the crypto bull run. However, the network faced several challenges, including multiple outages caused by malicious bots that flooded the network with transaction requests.
Source: coingecko.com
The price of Solana has declined by 80.2% in 2022, with an 87.1% loss since hitting its all-time high. The volatility of cryptocurrencies is well-known, and Solana is no exception.
The SOL token experienced several significant single-day declines in price, including a 16% drop in January and 18% and 24% declines in May but it was not only Solana.
The Terra-Luna crash and the hike in interest rates were two major reasons behind the decline in the value of cryptocurrencies, including Solana.
Despite the recent challenges, Solana has a remarkable history of growth. The value of each SOL token was 4 cents during the seed sale, which means 6500x to its all-time high. In the third quarter of 2022, the network and financial performance were mixed, with a decrease in user activity and revenue, but an increase in transaction activity and TPS. This was primarily due to improved network performance and the implementation of the Mainnet Beta V1.10 series. The fee prioritization mechanism went live, bringing more stability to the network and allowing for all-time high TPS, with an average TPS of 3,200 that improved by 40% compared to the previous quarter.
News about Solana’s sectors other than DeFi
Solana’s NFT sector continues to thrive despite the DeFi sector’s slowdown and stabilization. The daily production of new NFTs has risen to over 8 million, showing a 19.3% increase from the previous quarter. This growth is a continuation of the 46.4% growth seen in the Q2 of 2022 and is nearly 8.5 times the amount minted in 2021.
The success of Solana’s NFT ecosystem can be attributed to the ongoing advancements made by Metaplex’s Digital Asset Standard, the fundamental token standard for NFTs on Solana; new open-source minting solutions are gaining popularity and no-code options for non-technical creators are being introduced. This collaboration between Solana and Metaplex offers creators a seamless experience when launching NFTs.
In addition to its strong NFT market, Solana is also poised to play a major role in the growing GameFi ecosystem, as networks like Ethereum, Avalanche, and others move towards expanding their offerings in this sector.
Another exciting development for Solana came when Helium, the decentralized wireless network powered by cryptocurrency, decided to move from its native blockchain to Solana through a successful on-chain voting process. This move expands the potential use cases for Solana beyond just DeFi, NFTs, and GameFi.
Solana (SOL) tokens supply
- According to Solana Explorer, SOL’s total supply stands at 540.240.062 million tokens. As of 8 January 2023, the total circulating supply for SOL stood at 373.274.429 coins which means that now, almost 70% of Solana’s total supply is circulating in the market.
- There is no maximum supply for SOL. The number of coins in circulation progressively increases as validator nodes are compensated for processing the blockchain’s transactions. According to the team’s projections, by the next 15 years, SOL’s total supply could exceed 800 million at some point.
- The Solana Foundation has established an initial inflation rate of 8% for the network and a long-term inflation rate of 1.5%. The staking rewards offered by Solana are typically established based on this parameter.
- Solana’s ownership is heavily fragmented, meaning that single wallet addresses do not own large percentages of the token’s total supply, but we know that the top 100 holders own around 32% of the token’s total supply.
