In this article we delve into the Solana DeFi ecosystem, increasingly in the spotlight after the continuous price increases of SOL, which has grown by a total of 560% since the beginning of the year.
The Total Value Locked (TVL) metric of the chain, which is the sum of the capital locked within it, is reemerging after a rather disastrous 2022.
The flagship applications of the decentralized network are attracting volumes again, while new platforms are emerging at the same time, capturing the attention of the general public of web3.
Even the recent case of the BONK airdrop has given a strong positive boost to Solana’s DeFi, which is experiencing one of its most prosperous moments of 2023.
If things continue in this way, next year will be very hot for SOL and its entire ecosystem.
Let’s see all the details below.
Summary
DeFi on Solana: analysis of Total Value Locked (TVL)
The best way to assess the overall situation of DeFi on Solana is to analyze the trend of its TVL.
This metric provides us with precise information on the total sum of capital locked and allocated by investors on various decentralized applications of the blockchain, highlighting moments of growth and weakness.
Currently, Solana’s TVL amounts to $1.18 billion, still far from the $10 billion reached in November 2021 but at the same time strongly recovering from the bottom of $210 million reached in December 2022.
Although, indeed, last year was a very difficult period for Solana (and more generally for the entire crypto sector), from mid-2023 onwards things started to take a completely unexpected positive turn.
While many “cryptocurrency experts” were declaring this DeFi ecosystem dead, by July 2023 the TVL of the network had returned to $300 million after 8 months without a similar value being recorded.
From October onwards, thanks to the return of interest in SOL which started a very aggressive upward trend, many capital have started to flow into Solana, causing its locked value in DeFi to grow at an extremely high rate.
On Halloween day, the level of 400 million dollars was reached and just 11 days later another 100 million dollars were added to the loot.
At the end of November, this value amounted to more than 650 million dollars, while the psychological threshold of 1 billion dollars was officially reached on December 15th.
The road is still very long before we can return to an ATH of this metric, but seeing the trend of the last 3 months, we cannot exclude that this will happen during 2024, a year that theoretically should be bullish for the entire sector.
Currently, Solana ranks fifth in terms of blockchain with the highest TVL, behind only Ethereum, Tron, BSC, and Arbitrum.
The best decentralized applications on the Solana blockchain
Among the decentralized applications (dapps) that have contributed the most to increasing TVL in Solana’s DeFi during 2023, there are several names, but only the top 10 have truly made a difference in bringing the blockchain to compete with the industry giants.
At the top of the ranking we find the liquid staking platforms Marinade Finance, Jito, Lido, and Blaze Stake, particularly favored by investors due to the profit opportunities offered by the market with the exponential growth of SOL price recorded in 2023.
Overall, these dApps collect more than 50% of the TVL present in the entire Solana Defi niche.
Next, we find decentralized DEXs and pool aggregators like marginFi, Orca, Raydium, and Saber.
To underline how MarginFi, born just in March 2023, has immediately gained popularity among internet users, reaching over 300 million dollars of TVL (growing by 140% in the last month) in a short time.
Other successful sectors that have been targeted by the on-chain activities of investors are those of derivatives and lending platforms: among the most important applications in this field we find Kamino, Drift, and 01.
Kamino in particular had a sparkling 2023, going from just 3.5 million dollars of blocked capital in January to the current 175 million dollars.
It is very interesting to observe all the dapps present on Solana. We have seen an increase in numbers in the last month regarding TVL, which is a testament to the fact that DeFi on the chain has been pushing a lot in recent times.
Among the most interesting emerging projects in this sector, which promise great things in the coming year, we see:
- Meteoria, liquidity protocol
- Hawksight, liquidity manager platform
- Zeta and Dual Finance, decentralized options markets
- Sunny, yield protocol
BONK Case: How an airdrop can disrupt the fate of a DeFi ecosystem
Undoubtedly, one of the most unexpected surprises that the Solana DeFi ecosystem has hosted in this 2023 is the case of the memecoin BONK.
The cryptocurrency was born in late December 2022, while SOL and all the other native tokens of the Solana blockchain were hitting all-time lows, but it is only starting from November that an unprecedented bull run in the history of cryptocurrencies begins.
Starting from November 6th, BONK’s market capitalization has increased from $60 million to the current value of $1 billion.
Since the beginning of the year, the price growth of this token has been 17,000%, making many early investors of the crypto-meme very wealthy.
The factor that has contributed the most to making the memecoin famous among the stakeholders of the Solana DeFi landscape was the airdrop that its team decided to implement in June.
All developers of the cryptographic network, SOL stakers, DeFi users, NFT buyers on the chain, and buyers of the web3 smartphone SAGA, have received free BONK tokens, which have quickly reached an enviable value.
After BONK, many other projects have decided to launch their own digital resource through airdrop, contributing to attract a lot of capital and attention within the Solana crypto ecosystem.
Among these we find JITO, the token of the homonymous liquid staking platform, which just a few weeks ago made its debut on the market with a special marketing incentive, quickly reaching a market cap of 300 million dollars.
The success of BONK has been so great that it has caused a surge in trading volumes of the blockchain and an increase in the number of its users.
Believe it or not, those who purchased SAGA, the Solana-branded web3 smartphone, initially received an airdrop of BONK tokens that were initially worth only $10 but in a few months grew to reach $1000 and beyond.
All this has led to an important opportunity for “arbitrage”, considering that the list prices of the Solana product were only $600 in June 2023.
By buying SAGA a few days ago, you were entitled to an airdrop worth +1000 dollars, spending just 600 dollars: this has pushed the list prices of the smartphone to about 2000 dollars in a few days.
