Sharp Decline in SOL Price Leads to Massive Liquidations on Exchanges
Over the past 24 hours, the volatility in SOL price has resulted in significant liquidation of long positions on centralized exchanges. This volatility caused over $7 million worth of positions to be liquidated, with the majority being longs.
The overall crypto market witnessed liquidations of over $88 million in long positions during this period. CoinGlass data shows that a total of $126 million was liquidated across various centralized exchanges.
In derivatives markets, liquidations occur when a trader’s position is forcefully closed due to insufficient funds to cover losses. This happens when market movements go against the trader’s position, depleting their initial margin or collateral.
Solana Transaction Volume Decreases
The transaction volume of Solana-based tokens has declined after reaching a 12-month high in early January. Data from The Block’s Data Dashboard reveals that the economic throughput value of SOL and SPL tokens on the Solana blockchain dropped from nearly $47 billion to around $34 billion within a week.
The number of active addresses on the Solana network has also decreased from around 981,000 to approximately 599,000, according to The Block.
Proposal to Deploy Aave v3 on Neon EVM
The Solana network received a boost with the announcement that Aave’s governance body is considering deploying Aave v3 on Neon EVM. Neon EVM is a smart contract platform that enables Ethereum dapps on the Solana network.
The proposal aims to expand Aave’s lending services to the Solana blockchain as a minimal viable product (MVP). Currently in the “temperature check” phase, community members can provide their feedback on the proposed integration.
If approved, the deployment would allow Aave to utilize Solana’s liquidity for its lending services. A version of Aave v3 has already been deployed on Neon EVM’s developer-focused testnet (devnet).
Hot Take: Solana Faces Price Volatility and Decreased Transaction Volume
Recent price volatility in SOL has led to substantial liquidations of long positions on centralized exchanges, resulting in significant losses for traders. The overall crypto market also experienced a surge in liquidated long positions, contributing to a total of $126 million in liquidations across various exchanges.
In addition to the price volatility, Solana’s transaction volume has decreased significantly. The value of economic throughput for SOL and SPL tokens on the Solana blockchain dropped from a yearly high to around $34 billion within a week. The number of active addresses on the network also saw a decline.
Despite these challenges, there is optimism surrounding the potential deployment of Aave v3 on Neon EVM. If approved, this integration could provide increased liquidity for Aave’s lending services and further enhance the capabilities of the Solana network.
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