A Nansen analyst recently published a report delving into the Solana ecosystem, exploring on-chain data, network developments, and other findings.
According to the results, amid challenges such as network downtime and the FTX/Alameda saga, the Solana Blockchain shows great resilience and continuous improvements, achieving 100% uptime so far.
Solana’s performance so far
The report shared via Series
Solana: past, present and future
We are excited to publish our in-depth, comprehensive research in… @Solana environmental system. @sandraaleow Covers ecosystem catalysts, risks, highlights, explores onchain data, network development, and much more
Here are the main findings…
– Nansen (@nansen_ai) October 5, 2023
Monthly transactions associated with Solana remained quite stable, while voting transactions increased significantly. According to Nansen, this increased deal and TVL demonstrate its potential for active economic activity.
Nansen analyst Sandra also mentioned some of the solutions offered by Solana. For example, fee markets and government lobbying have addressed key issues in their technology stack.
State compression has reduced the cost of NFT mining by more than 2,000 times. Before this status pressure, minting 1 million NFTs on the Solana network would have cost the creator around $253,000. The compression brought the cost down significantly to just $113.
The Nansen analyst compared Solana to minting 1 million NFTs on Ethereum or Polygon, which could cost more than $33.6 million and $32.8 thousand, respectively.
Prominently highlighted in the discussion was the rapid expansion of the liquidity signature space within the Solana network, led by Marinade Finance, Lido Finance and Jito_sol. However, despite the significant growth in Solana’s liquid harvesting protocols, the report acknowledges that there is still significant potential for further expansion, with only about 3% of fortified SOL currently allocated to these protocols.
Furthermore, analysts noted increased interest in enterprise adoption and payment issues following Visa’s integration of USDC settlement on the Solana blockchain. The Visa USDC integration is primarily aimed at achieving faster finality and high throughput at almost negligible costs for users.
One tweet also pointed to potential growth factors, saying:
“Other potential tailwinds for Solana include increased enterprise adoption, success in executing the Firedancer vision, and growing consumer-facing applications that leverage Solana’s benefits.”
The report also notes that Solana is gaining interest in consumer-facing applications. She praised Solana’s technical achievements, potential partnerships and infrastructure applications, all signs of his promise.
Potential challenges on the horizon
After highlighting some of these positives at Solana, the report noted that challenges remain, including uncertainty regarding FTX/Alameda’s SOL holdings. Negative news on these holdings will be a temporary drag on SOL’s growth.
However, there are about 71.8 million SOL, equivalent to $1.16 billion, locked on FTX – about 17% of the circulating supply of SOL and 13% of the total supply. The results of the SOL tokens and their eventual issuance will likely impact the future of the token.
According to recent reports, approximately 9.1 million SOLs belonging to Alameda Research were no longer available, causing the current price decline.
Solana’s price action may also have been another challenge, as the asset has traded in the red throughout the year. However, a look at the price since January suggests that SOL started the year trading at around $10 and is currently above $20.
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