- Solana’s TVL hits its highest level in two years.
- DeFi exchanges benefit greatly.
- Solana’s market capitalization grew even faster in 2024.
High-performance chain Solana has had an incredible year, with gains in almost every major indicator. SOL is once again breaking records in the DeFi ecosystem after recording a year-to-date price increase of 461.08%.
The network’s Total Value Locked (TVL) soared to $6.433 billion, the highest since January 2022. This growth in the DeFi ecosystem coincides with significant TVL and trading volume growth in decentralized protocols.
Why Solana’s DeFi Ecosystem is Growing
Solana’s DeFi ecosystem is rapidly expanding. As of October 23, Solana Network’s total fixed value (TVL) reached $6.24 billion. The main reason for this growth is the increase in TVL and trading volume on the Solana decentralized exchange.
One of the main reasons for this was the surge in TVL on the Raydium exchange. Over the past 30 days, Raydium’s TVL has increased by 64%, reaching its current level of $1.579 million. Raydium’s daily trading volume was $1.197 billion on October 23, and monthly trading volume in September was $18 million.
High trading volume means increased need for liquidity for Raydium, which is pushing TVL higher. At the same time, Raydium’s revenue is growing due to increased trading volume, which supports its valuation. In particular, Radium’s daily fees reached an all-time high of $3.41 million as of October 21, surpassing Ethereum’s $3.35 million fee.
What DeFi Growth Means for Solana
Raydium is not alone in benefiting from the Solana protocol. Most other protocols have seen double-digit TVL increases over the past 30 days. Zito, Camino, Jupiter, and Marinade rose by 16.32%, 12.23%, 23.59%, and 24.70%, respectively.
Solana’s DeFi growth is also boosting its valuation. Solana’s market cap is currently $78 billion, close to its all-time high of $86 billion in March of this year. In particular, after the Solana crash in 2022, Solana’s market capitalization grew faster than TVL. This means that investors are looking at other indicators, including volume, to gauge the price of SOL.
Currently, the growth of TVL puts Solana at a notable distance from Tron, which currently has a TVL of $6.969 billion. If current trends continue, Solana may overtake Tron and become the second largest chain on TVL after Ethereum.
On the flip side
- Despite Solana’s strong growth, it still lags far behind Ethereum. Dominating DeFi. Ethereum’s TVL is $48.5 billion, which is higher than all other chains combined.
- Solana’s Pump.fun, the core protocol for the memecoin sector, has been launched. sell aggressively SOL token. Platform accounts that collect fees sold $41.64 million in early September.
Why This Matters
A surge in Solana’s TVL indicates Solana’s growing importance in the DeFi sector and will also support the price of SOL.
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