The recent network upgrade of Solana has further solidified its position as a leading web3 hub, effectively addressing the issue of transaction congestion. However, the price of Solana (SOL) has been experiencing a bearish trend in the past five weeks, mirroring the overall sentiment in the cryptocurrency industry as traders eagerly await a bullish signal from Bitcoin.
As a fast-growing web3 hub, Solana has garnered support from top-tier institutional investors and a vibrant online community. The network has made significant strides in the tokenization of real-world assets (RWA), boasting a stablecoins market cap of over $3.2 billion and a bridged total value locked (TVL) of more than $20 billion, according to defillama data. In comparison, the Binance Smart Chain (BSC) has a stablecoins market cap of approximately $5.1 billion and a bridged TVL of $12 billion. The measure of bridged TVL is crucial in assessing the interoperability of underlying DeFi platforms on a given layer one chain.
Visa, a major multinational payment card services company, has highlighted the rising demand for Solana-based stablecoins. According to on-chain data provided by Visa, Solana has outperformed other layer-one chains in terms of stablecoin transactions in the past 30 days. Notably, Ethereum (ETH) recorded less than 20 million stablecoin transactions during this period. Other layer-one chains with less than 20 million stablecoin transactions included Tron (TRX), Avalanche (AVAX), and Optimism (OP). In contrast, Solana registered over 120 million stablecoin transactions, surpassing its closest competitor, Binance Smart Chain (BSC), which recorded around 70 million transactions.
In terms of specific stablecoins, Visa noted that Circle’s USDC on the Solana network has recorded over 1.23 billion transactions since January 2023, amounting to approximately $4.59 trillion. Additionally, Solana has registered a total of 166 million transactions in Tether’s USDT, worth around $278 billion. Overall, the Solana network accounted for the majority of the 352 million stablecoin transactions, amounting to approximately $2.3 trillion, in the past 30 days.
The success of Solana can be attributed to its thriving ecosystem for meme coins and other web3 projects. Market data from Coingecko reveals that Solana-based meme coins have a combined valuation of approximately $7 billion and an average daily trading volume of around $1 billion. Meanwhile, the core developers of Solana have been diligently working on a network upgrade to foster sustainable adoption and enhance competitiveness against other web3-based blockchains in terms of user acquisition.
Despite the recent bearish sentiment, Solana’s price has experienced remarkable growth over the past year, surging over 500 percent to reach approximately $136 on April 29, 2024. From a technical standpoint, as long as the support level around $124 remains intact, the SOL price against the US dollar is expected to continue its upward trajectory. Furthermore, if the ETH/BTC pair continues to rebound in the coming weeks, it is likely that SOL will lead the altcoins in a generally bullish outlook.
In conclusion, Solana has emerged as a prominent web3 hub, propelled by its network upgrade and increasing demand for its stablecoins. The network’s success in the tokenization sector, as well as its thriving meme coin ecosystem, has contributed to its growing popularity. While the recent price trend has been bearish, the future outlook remains optimistic, especially if Bitcoin signals a bullish trend.