The price of SOL has dropped by 48% year to date, and statistics reveals that its decentralized app usage is dwindling, but there are a few reasons to be optimistic.
The year 2022 has not been kind to cryptocurrencies, with the overall market capitalization falling by 21% to $1.77 trillion. Solana’s (SOL) adjustment has been more more harsh, with the year adjustment of 48.5 percent.
With $35 billion in value locked, Solana leads the staking charts, accounting for 74% of all SOL tokens in circulation. The underperformance can be attributed to a number of factors, including four network disruptions in late 2021 and early 2022.
The most recent event, which occurred on Jan. 7, was caused by a distributed denial-of-service (DDoS) assault, which prompted Solana Lab developers to change the code and, as a result, refuse these requests.
Investors, on the other hand, are more concerned about the centralization that the expenses of being a Solana validator have generated. The suggested gear for 400 millisecond block timings is a 12 core 2.8GHz CPU, 256 GB memory, high-speed 1 TB SSD storage, and a low-latency internet connection.
The Nummber of People Using digital apps is Decreasing
After the network’s total value locked (TVL) began to loiter at $15 billion in November, Solana’s principal decentralized application statistic began to show deterioration.
The graph above shows how Solana’s decentralized application (DApp) deposits dropped by half in three months, reaching their lowest point since September 8. In comparison, Fantom’s TVL has doubled in three months and now stands at $9.5 billion. Terra (LUNA), another DApp scaling solution competitor, saw its TVL increase by 87 percent to $23.2 billion.
FTX.US, the American subsidiary of the global crypto derivatives and spot exchange FTX, has announced the launch of a new blockchain gaming division. It’s also worth noting that on Nov. 5, Solana Ventures teamed up with FTX and Lightspeed Venture to form a $100 million fund dedicated to the industry.
Analyze DApp usage metrics to see if this decline in TVL is something to be concerned about. Because certain DApps aren’t financially intensive, the amount deposited isn’t important.
On average, the number of Solana network addresses engaging with decentralized applications decreased by 18%. Solend, an algorithmic loan system, was the single beneficial development.
Solana’s futures open interest, which peaked at $2 billion on Nov. 6 and was subsequently smacked with a severe correction, showed the drop in interest in DApps.
The Gaming Industry could be a Pleasant Surprise
Despite the fact that Solana has been impacted the most compared to other smart contract platforms, network usage on non-fungible tokens (NFT) marketplaces is strong, as seen by Magic Eden’s 178,820 active addresses in the previous 30 days.
Furthermore, Solana Ventures’ wager on the gaming industry could highlight the network’s processing power even more. Games, for example, account for half of the top ten DApps on every blockchain examined by DappRadar. Splinterlands, with 578,280 active addresses, and Alien Worlds, with 544,900, are among them.
The above statistics indicates that Solana is losing ground against competing chains, but holders need not worry because 74% of the coins are still staking. There is no reason to be bearish on Solana Labs as long as its relationships and investments continue to show promise.
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