Solana: Can this metric help SOL in its continued fight against market uncertainty
- Solana’s ecosystem showed positive growth with local market fee adoption
- Developer activity continued to rise on Solana while TVL declined
According to a tweet by Messari on 17 December, despite the general FUD plaguing the crypto market, Solana’s [SOL] ecosystem showed signs of growth.
.@solana‘s introduction of “Local Fee Markets” allow users to send priority fees to validators to prioritize their transactions.
The result is less spam and more efficient use of blockspace. pic.twitter.com/DAsYKAUWCg
— Messari (@MessariCrypto) December 17, 2022
Read Solana’s [SOL] Price Prediction 2023-24
One reason for Solana’s growing ecosystem could be the network’s local fee market adoption. The introduction of the local fee market allowed users to send priority fees to validators to prioritize their transactions. This resulted in the reduction of spam, and nodes could use of Solana’s block space better.
Developers remain interested in Solana
In a spot of good news, developers were interested in Solana despite the volatile market conditions. According to data provided by Token Terminal, the number of active developers on the network continued to increase despite declining prices. Thus, there was an increase in the number of contributions being made to Solana’s GitHub.
Price of $SOL 📉, but core developer activity on @solana 📈 pic.twitter.com/u1Gspi14LS
— Token Terminal (@tokenterminal) December 17, 2022
The growing number of developers and subsequent development activity could help ease the transition of TIPINs (Token Incentivized Physical Infrastructure Networks) to the Solana network. TIPINs primarily use token rewards to incentivize individuals to complete real-world activities.
The emergence of TIPINs would thus be a key factor in Solana’s growing ecosystem. TIPINs such as the Helium network, Hivemapper, and Teleport could bring more users into the Solana ecosystem.
The NFT angle
The NFT market was one of the few sectors where Solana witnessed positive and consistent growth. The increasing interest in Solana‘s NFTs could contribute massively to Solana’s ecosystem going forwards.
From Solana Floor‘s data, it was observed that the Solana Blue Chip Index had moved in a positive direction over the past 30 days. Coupled with that, the total floor value for Solana’s NFTs increased as well. Solana’s total floor value had gone from $154 million to $253 million in the last month.
However, despite the improvements witnessed in the Solana ecosystem, its TVL was massively affected over the last month.
Based on information gathered from DefiLlama, Solana’s TVL fell from $1 billion on 1 November to $256 million at the time of writing.
Subsequently, the fees generated by Solana decreased as well. According to Token Terminal, Solana’s collected revenue declined sharply after 7 November. The revenue generated fell by 50% since then, falling from $52,484 to $26,580 in 40 days.
It remains to be seen whether Solana’s ecosystem can overcome its current hurdles.