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digital
daily

digital daily: Solana’s Resurgence

Solana’s Resurgence: Solana ended the year on a weak note. Whereas leading digital assets recovered from the November FTX crash, Solana fell to fresh lows. A new beginning? Solana has surged to two-month highs, led by Vitalik’s support and an NFT meme-coin launch. The airdrop of the Solana-based, Bonk, served as a reminder of Solana’s potential to support NFT activities, re-igniting community interest. Are we right back to a cycle of excess speculation? Inflows into Solana’s ecosystem are massive, and Bonk token yields went bonkers. But market capitalization is down nearly 90% from a year earlier, even after this resurgence. Recovery is more about Solana fighting for relevance. And broader network fundamentals demonstrate resiliency. Solana continues to have the highest volume of daily transactions. In active users, it trails only the Binance Smart Chain and Ethereum. Network validators remain strong, having recovered to pre-FTX levels, and installations of development kits are trending higher. Network activity is concentrated in NFT marketplaces, with Magic Eden drawing the most share. Can the NFT market support a stronger valuation of the Solana network? The announced departure of the top two NFT projects on Magic Eden casts doubt. Solana’s future may lie in innovative, decentralized infrastructure. For now, the Solana mobile phone and integrations with the decentralized wireless network, Helium, are the highest-profile applications. Use cases will be the differentiator for blockchains coming out of this bear market. Solana’s resilience keeps it alive to play a role in that trend. 

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