Insights into Growth and Trends of Solana (SOL) blockchain (June 2024)
Unlock the insights of Solana’s performance in May 2024! Our report reveals the ups and downs of this leading blockchain platform, providing a comprehensive view through key indicators such as dApps ecosystem, active wallets, transaction volume, fees, validators, and more. With detailed analysis, discover how Solana is evolving and where it stands in the blockchain race.
Below is presented the Latest analytics on Solana blockchain for May 2024.
Visit blockchainmetrics.online for more analytical materials.
Solana (SOL) — based on the results of May 2024 Solana takes 5 place in the ranking of leading blockchain platforms, based on the sum of key indicators.
These key indicators are presented below.
(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.
We are observing a significant increase in the total value locked (TVL) in decentralized applications (dApps) on the Solana blockchain. In May, the metric rose by 14.18% compared to the previous month, indicating the growing popularity and adoption of this blockchain ecosystem. This development highlights the increasing interest in Solana and its dApps, which could have implications for the future of the blockchain industry.
This is a positive signal, for which Solana in May 2024 receives +1 points of the 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.
We are observing an increase in average daily active wallets on the Solana network. This is a promising sign for the health and growth of the network, as it indicates increased user engagement and interest in the ecosystem.
The increase of 0.6% represents a relatively modest change, but it is nonetheless significant considering that it is the result of a sustained trend over the course of the month. This indicates that the network continues to attract and retain users, which is a positive sign for the long-term health of the blockchain. We will continue to monitor this metric closely to gain a deeper understanding of the dynamics of user engagement on the network.
This is a positive signal, for which Solana in May 2024 receives +1 points of the platform development dynamics index.
(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.
In terms of the total transactions metric, the Solana blockchain experienced a decrease of -5.41% in May. This change may indicate that the network’s activity has decreased compared to previous months. The decrease in transaction activity is likely due to the fact that the number of failed transactions in the network is still very high. During April, this figure was around 65%, and in May it dropped to 57.9%.
This is a negative signal, for which Solana in May 2024 receives -1 points of the platform development dynamics index
(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.
We are observing a decrease in total fees on the Solana network in May compared to the previous month. The total fees have dropped by -3.74% compared to March. It seems quite logical that, given the decline in transaction volumes, the volume of fees would also decline.
This is a negative signal, for which Solana in May 2024 receives -1 points of the 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.
During the last month, there has been a change in the average fee in USD on the Solana network. The average fee increased by 4.98% to $0.045, which is a notable increase compared to the previous month. This change is likely due to several factors, but, undoubtedly, one of these factors is the increase of price of the Solana token. Which has grown by about the close amount. It is important to note that the average fee remains relatively low compared to other blockchains.
This is a negative signal, and unfortunately, for this metric, Solana gets -1 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.
During the last month, there have been changes to the ‘active validators’ metric on the Solana blockchain, with a decline of -12.57% compared to the previous month. This represents a notable decrease in the metric, underscoring the volatility and fluctuations in the network’s active validator count. These changes are significant enough to warrant attention and further analysis by the community and stakeholders.
This is a negative signal, for which Solana in May 2024 receives -1 points of the platform development dynamics index
(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.
In May, there was an increase of 11.13% in the ‘ranked projects’ metric on the Solana blockchain, while in April there was a growth of 20.05%, and in March — of 28.66%. These changes are part of a clear upward trend, which indicates the continued development and adoption of the Solana platform. The Solana blockchain has been gaining popularity among developers and projects due to its high throughput, low transaction fees, and scalability. Among decentralized applications in May, it is worth paying attention to Raydium, which showed a growth of 27.03% in the number of active wallets. And also Jupiter Exchange, which showed a growth of 32.53% in the number of transactions in the past month. The increasing number of ranked projects on the Solana network demonstrates the platform’s ability to support a diverse range of applications and services. This is a positive sign for the future growth of the Solana ecosystem, as it suggests that more developers are interested in building on the blockchain.
This is a strong positive signal, for which Solana in May 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.
Among leading dApps on Solana, only dApps of the DeFi category dominate. These applications offer a wide range of decentralized financial services, including lending, borrowing, trading and yield farming, among others. But it is worth mention that lack of diversity in use cases can limit the long-term growth and sustainability of the platform. To date, Solana has done little to diversify its dApps ecosystem. So, no points for this metric Solana receives. 0 points.
(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 blockchain in May 2024. Therefore, Solana blockchain does not receive a penalty point for this metric. 0 points.
Summary chart
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 in May 2024 is 0.
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. Increase in Number of Decentralized Applications (dApps)
The growth in the number of decentralized applications (dApps) on the Solana blockchain is a positive signal. In May 2024, there was an increase of 11.13% in this metric, following similar growth trends in previous months. This consistent upward trend highlights the continued development and adoption of the Solana platform, making it more attractive to developers and users. A diverse and expanding dApp ecosystem indicates long-term potential and resilience, ensuring that Solana can support a wide range of applications and services, thereby enhancing its appeal to end-users.
Negative signals:
1. Decline in the number of active validators
The decline in the number of active validators on the Solana blockchain is a negative signal. There was a notable decrease of -12.57% in the number of active validators in May 2024 compared to the previous month. This reduction can affect the decentralization, reliability, and stability of the platform, potentially making it less secure and resilient. Especially, it was meaningful shift amid of the continuously high number of failed transactions, which still is more than 50%.
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