Solana’s Q3 2024 Report: A Mixed Bag of Growth and Challenges 🚀
This article delves into the significant developments surrounding Solana in the third quarter of 2024. It reflects on the rise in investment activities while acknowledging the decline in on-chain transactions. The Blockchain continues to be a focal point for various projects, showcasing both promising growth and areas of concern.
Investment Surge Amidst Declining Usage 📈
During the third quarter of this year, Solana experienced a robust increase in investment regardless of a downturn in on-chain activity. As detailed in the recent ‘State of Solana: Breakpoint Edition’ report, 29 projects on the Solana framework managed to obtain $173 million in private investments — representing the highest funding level since the second quarter of 2022. Each month of Q3 2024 demonstrated growth, culminating in a remarkable $103 million raised in September alone, marking the strongest performance since June 2022.
Tokenized Treasury Market Expansion 🌟
The tokenized treasury sector within Solana has seen remarkable success, doubling its total value to $123 million within a month. The catalyst for this increase was a noteworthy $50 million inflow of USDC from the Ethereum network on September 23.
- Despite being positioned third in the realm of tokenized treasuries — trailing behind Ethereum at $1.6 billion and Stellar at $422 million — Solana’s recent advancements indicate significant room for future growth.
Noteworthy developments have been emerging from several firms. For instance, Hamilton Lane, an alternative investment management company, initiated the first private credit fund within the Solana ecosystem in late July.
Additionally, Franklin Templeton, a prominent global asset manager overseeing approximately $1.7 trillion in assets, has outlined plans to establish a money market fund on the Solana blockchain. Upon launch, it will be the inaugural asset management firm to issue securities on the network via a public registration statement with the SEC.
During the Breakpoint conference, Securitize, a firm specializing in digital asset securities, announced provisions for native Solana support, thereby enabling the deployment of its tokenized assets onto the network.
Institutional Collaborations and New Ventures 🤝
In May 2024, BlackRock allied with Securitize to create the BlackRock USD Institutional Digital Liquidity Fund (BUILD), which has since amassed notable assets under management. A significant portion of BUIDL’s on-chain supply is currently allocated as reserves for Ondo’s OUSG fund.
Ondo, a decentralized finance protocol that expanded to Solana in late 2023, has the potential to accelerate the integration of BUIDL within the Solana framework, thereby enhancing the platform’s financial offerings.
On-Chain Activities Face Tough Times 📉
Despite the heightened institutional attraction, Solana has encountered a decrease in on-chain activities over the previous six months. Monthly transaction fees have plummeted by 66% from their peak in March 2024. Nonetheless, these figures are still substantially higher than those recorded a year earlier, reflecting a remarkable increase of nearly 1,900% compared to last year.
In March, while transaction fees reached a zenith, the market share of these fees expanded until July, ultimately achieving a noteworthy 25%. Previously, Solana had never surpassed a market share of 1.5% in transaction fees. In the span of the last six months, the platform accumulated $260 million in total fees, positioning it in third place after Ethereum ($752 million) and TRON ($268 million).
The report underscores that this total fee outcome stemmed from transaction volume rather than inflated individual fees. The average fee during this timeframe stood at $0.02, a stark contrast to Ethereum’s $3.58, TRON’s $0.22, BNB Chain’s $0.13, and Base’s $0.05. As of early October, Solana holds a total locked value of $5.6 billion, with this figure showing a consistent upward trend since the beginning of 2024.
Currently, the native cryptocurrency of Solana, SOL, is valued at $148, reflecting an increase of over 15% in the past month.
Hot Take: Navigating the Future of Solana 🔮
As Solana positions itself at the intersection of institutional interest and a fluctuating on-chain landscape, it faces the challenge of leveraging recent investments to stimulate growth. The dynamic evolution within its tokenized treasury market and collaborations with high-profile firms indicate that while challenges exist, opportunities for expansion also abound. Future strategies will determine how effectively Solana can solidify its role in the broader blockchain ecosystem and maintain momentum in both investment and usage.
By
By
By
By
By