Solana (SOL), known as the “world’s fastest blockchain,” has been in the news for its fast transactions and rising token prices. There may be problems below the surface, though, that need to be fixed.
New data from CoinGecko shows that Solana is faster than competitors like Polygon and Ethereum in terms of transactions per second (TPS). This shows that many people could use it and that blockchain technology could grow. But a more in-depth look shows that things are not so simple.
If there are more daily active addresses but fewer daily transactions, there will be more unique people on the network. However, even though more people are joining the Solana ecosystem, they are not earning a lot of transactions. We want to know if these people are just taking part for fun or if there is something more going on.
Solana’s DeFi TVL Rises
Also, Solana’s transaction fees have gone down. This will be beneficial for consumers, but it could also be bad. This could make it easier for deals to go through, which would make it harder for Solana to make money in the long run. One reason why the number of daily transactions may not have changed is that fees may have gone down, and there may be less traffic on the network.
Solana’s Total Value Locked (TVL) for Decentralized Finance (DeFi) keeps going up as well. TVL tokens show the total worth of all the digital assets saved in DeFi protocols. Solana is becoming more popular in DeFi, where people lock up their crypto to earn interest or do other financial things. This shows that the economy as a whole is healthy.
Technical signs, such as the funds’ Flow Index (MFI), suggest that the current rise might not last and that the price of SOL might go down. Mixed signs about network activity and falling fees make investors unsure about Solana’s long-term prospects.
These worries notwithstanding, Solana’s fast transaction times and strong DeFi presence are undeniable benefits. CryptoGecko data shows that SOL was selling at $185 at the time of writing, up 7.1% on the daily timeframe and 26.0% on the weekly timeframe. When you combine this price increase with the network’s fast transaction speeds, you can see how much promise the project has.
To solidify its place as a top blockchain platform, SOL needs to answer questions about the activity on its network and its long-term viability while keeping its price increases.
