Insights into Growth and Trends of Solana (SOL) blockchain (April 2024)
Discover the latest developments in the Solana blockchain platform as of March 2024! Dive into this insightful document to explore the platform’s growth dynamics, key metrics, and potential opportunities and challenges for users. This article offers valuable insights into Solana’s journey towards becoming a leading blockchain platform.
Below is presented the Latest analytics on Solana blockchain for March 2024.
Visit blockchainmetrics.online for more analytical materials.
Solana (SOL) — Based on the results of March 2024 Solana continues to take third place in the ranking of leading blockchain platforms (based on the sum of key indicators)
These key indicators are presented in the infographic:
(1) dApps ecosystem TVL.
This metric indicates how developed the ecosystem of decentralized applications on this blockchain is and how valuable this ecosystem expressed in fiat money. And although, of course, changes in the metric are still in most cases a reflection of speculative sentiments, stable growth over a long period of this metric indicates the growing broad adoption of the blockchain.
In March, TVL of the Solana blockchain decentralized application ecosystem soared 23.5%. And the month before that by 19.35%. And in January by another 8.5%. We see a strong upward trend.
For this Solana for March 2024 gets 2 points of platform development dynamics index.
(2) Average number of daily active wallets.
This is an absolute customer metric. This metric directly indicates whether more and more people are using the platform or, conversely, whether the platform is experiencing an outflow of real active users.
Solana has experienced an unprecedented influx of active wallets in recent months. Over the past three months, the figure has increased from 411,582 in January to 922,611 in March, i.e. by 224%. We see a clear, powerful trend towards expanding the consumer base of platform services.
Therefore, without a doubt, for March 2024 Solana has gained 2 points of platform development dynamics index for this metric.
(3) Transaction volume.
This is another customer activity metric. This metric shows how actively existing users are utilizing the platform. Which is also an indicator that speaks about the current model of use of the platform, how often on average one active wallet makes transactions. An increase in transaction activity is always good, but a decrease indicates negative trends.
The level of transaction activity on Solana blockchain during the last period remained almost at the level of February 2024. The other circumstance is a bit curious. That was since January transaction activity has increased by only 20%. At the same time, as noted above, the number of active wallets more than doubled. It turns out that these wallets came not so much to make regular transactions as in anticipation of something.
However, for March 2024, Solana receives 1 point of platform development dynamics index for this metric.
(4) Fees & average transaction fee, in native token
For every operation performed by a user on the blockchain, be it a transfer of cryptocurrency from one wallet to another, a purchase on the Internet or an exchange of cryptocurrencies, the blockchain takes fees in the native tokens of this blockchain. On the one hand, high fees hinder user activity. On the other hand, high fees secures high income for the platform and high rewards for validators. This fosters the development of the platform. The total fees & avg transaction fee, in native token, metrics are tightly related. They may differ in value, but always have the same direction. If the average fee in native tokens increases, then the total volume of platform fees also increases. And vice versa. If fees in native tokens increase, this is a good signal for the development of the platform. These are direct incomes of the platform and platform validators. The higher this value, the more interesting it is for the community to develop this platform. It is important for you, as a consumer of the services of this blockchain (whether it is the active use of decentralized applications or simply investing in a blockchain token), to see that income is growing. However, it is important to maintain a balance so that the growth of fees remains within reasonable limits.
Following a decline in these figures in February, fees and average transaction fees in native tokens saw a phenomenal surge in March. Both metrics jumped almost threefold.
For this metric, Solana in March 2024 receives 1 points of platform development dynamics index.
(5) Average transaction fee, USD
As we noted above, for every operation performed by a user on the blockchain, be it a transfer of cryptocurrency from one wallet to another, a purchase on the Internet or an exchange of cryptocurrencies, the blockchain takes fees in the native tokens of this blockchain. And we also noted that the fees growth in native tokens is good, because it fosters incentive of the community and validators to participate in the development of the platform. But from the point of view of the average user, high fees in USD hinder activity. Users are not interested in increasing fees expressed in fiat currency. High transaction fees in USD value can stunt the development of any blockchain.
The most important competitive advantage of the Solana blockchain has always been extremely low, almost invisible commissions. But much to the chagrin of users of decentralized applications on this platform, this advantage has been melting before our eyes.
An interesting and distressing statistic. In November 2023, the transaction fee was $0.0007, while in March 2024 this value skyrocketed to $0.0283. This is more than 4000%!!!!
We are seeing a strong trend toward higher prices for Solana services. And now, among the leading smart contract blockchains, Polygon can successfully compete with Solana in terms of transaction costs.
For this metric, Ethereum has earned -2 points of platform development dynamics index.
(6) Number of validators
The more validators, the more decentralized the blockchain is. An increase in the number of validators foster the reliability and stability of the platform. Moreover, Overall, while increasing the number of network validators may not directly correlate with transaction costs, it has the potential to impact network dynamics in ways that the increase of validators might alleviate pricing pressures due to high demand on block space and improve overall network performance. Therefore, it is extremely important for ordinary users to see that the number of blockchain validators is growing steadily.
In February 2024, according to this metric, Solana reached its lowest level in recent times and, in March 2024, the number of validators increased by 4.3%
It is worth noting that the number of validators began to decline simultaneously with the beginning of the growth of active wallets and the growth of the ecosystem TVL (tokens prices).
Does the fact of a reverse movement in the direction of growth in the number of validators indicate that the TVL level is expected to decrease in the near future?
Or is this a logical reaction to a significant increase in the volume of platform commissions from transaction activity?
However, Solana receives a score of 1 point for this metric in March 2024.
(7) Number of decentralized applications
The more developed a blockchain has an ecosystem of decentralized applications that offers users a wide range of opportunities that go beyond simple peer-to-peer transactions or currency exchange, the more users make daily transactions on this blockchain. This in turn increases the income of the blockchain and validators and contributes to the further development of the blockchain. Therefore, from the point of view For an outside observer, seeing that the number of decentralized applications is constantly increasing is a positive signal, suggesting an inevitable increase in active wallets and transaction volume.
As we can see in the picture, the number of dApps on the platform during March increased by 28.66%
And this is generally a continuation of the strong growth of active dApps on the Solana platform. Over three months the growth was 39.8%. The number of active decentralized applications has increased by this percentage since the beginning of 2024.
This is a positive signal, for which Solana in March 2024 receives 2 points of the platform development dynamics index.
(8) Diversity of decentralized applications
It is no secret that the DeFi sector currently dominates the blockchain industry.
A developed ecosystem of decentralized applications, not limited to just one DeFi sector, with a high degree of diversity attracts users with diverse interests. If applications from other categories appear among the leading decentralized applications by metrics for the month, this indicates that the platform is finding other niches and attracting not only traders. In current realities, this is an important indicator of blockchain development.
If we evaluate the current situation with the diversification of decentralized applications on the Solana platform, then we need to get started with the fact that the QnA3 project moved to this platform in March 2024. Back in March 2024 yet, it was powerfully promoted on the BSC platform (https://medium.com/@BlockmetricsVM/unlocking-binance-smart-chain-bnb-potential-insights-into-growth-and-trends-march-2024-dfd19b904d51), and now it is at the top of the dApps rating on the Solana platform. For reference, QnA3 — AI Q&A service to comprehend user queries about web3 industry in general and DeFi in particular, AI trading assistant.
Overall, it is clear that platform’s developers are making significant efforts to diversify the ecosystem of decentralized applications. And nowadays among the most popular applications are applications from various categories, not just DeFi. As in the case of the Binance-Smart-Chain platform, the expansion of use cases for using the platform leads to a significant increase in the number of active wallets.
Therefore, according to this metrics, for March 2024 Solana earns 1 point of the platform development dynamics index.
(9) Unexplained anomalies
Sometimes when watching over at the metrics and statistics of blockchains and dApps, you come across the fact that a particular indicator may inexplicably experience a sharp increase, and then an equally sharp and illogical drop to the previous level. An example of such a situation is a multiple increase in active wallets without a noticeable increase in transaction activity within a single month.
This indicates manipulation with indicators. This means that something is not going as expected with blockchain. The purpose of such manipulations is different, but this is a bad signal for ordinary users.
No unexplained manipulations with metrics were recorded on the Solana platform in March 2024. Therefore, Solana blockchain does not receive a penalty point for this metric. 0 points.
Summary report
The maximum possible score for a blockchain can be 7 * 2 + 1 = 15 points
The minimum possible score for a blockchain can be 7 * (- 2) — 1 = — 15 points
Total platform development dynamics index for Solana 2024 in March is 8.
To sum everything up, from all these observations, several positive and negative signals can be identified for all those interested regarding the evolving track of the Solana blockchain:
Positive signals:
1. Growing dApps & Ecosystem TVL. Solana’s decentralized application ecosystem’s in terms of Total Value Locked (TVL) and quantity and diversity of dApps has been consistently increasing over the past few months, indicating strong adoption and value creation within the ecosystem.
2. Increase in Daily Active Wallets. Solana has experienced a significant increase in the number of daily active wallets, indicating a growing user base and adoption of platform services.
Negative signals:
1. Surge in Transaction Fees in USD Value. Despite the platform’s strengths, the transaction fees in USD value have seen a dramatic increase, rising by over 4000% from November 2023 to March 2024. This surge in fees have already wiped out the competitive advantage of the platform and could potentially launch the process of deterring users from engaging in transactions on the platform, impacting its development negatively.
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